Weekly Currency Index Technical Analysis – 2 February

Currency Index Notes

With no trades from last week’s analysis, this week we get some new trades with some good potential after having readjusted the analysis across most of the currency indices

AUDLFX:

  • Within the down sloping larger price channel, the major support at 1.54 – 1.53 was broken last week
  • Next major support comes in at 1.40
  • Friday’s candle closed as a spinning doji indicating indecision
  • Price could either head back to 1.54 – 1.53 or continue to drop
AUDLFX Weekly Analysis – 02/02/2015
AUDLFX Weekly Analysis – 02/02/2015

Conclusion: Our best case scenario is to look for AUD shorts after the retracement to 1.54 – 1.53 is completed. Stay aside AUD until we get further clues this week.

CADLFX:

  • Price broke down from the support level at 1.59 and promptly stalled near the lower support line of the price channel
  • We could expect to see a retracement back to 159, which shows a confluence of the bearish flag break out and the price channel’s support level
  • Friday’s candle is bearish, so we must wait for a bullish reversal candle to form
CADLFX Weekly Analysis – 02/02/2015
CADLFX Weekly Analysis – 02/02/2015

Conclusion: CAD could potentially look for gains this week, but we need more confirmation before we can look for short term long positions

CHFLFX:

  • Last week was bearish for the Swiss Franc, which is a follow through of the reversal spinning top
  • We can expect further declines down to the support at 2.0471 – 1.9797
CHFLFX Weekly Analysis – 02/02/2015
CHFLFX Weekly Analysis – 02/02/2015

Conclusion: Once price drops down to the previous support/resistance level we could perhaps expect to see some more SNB intervention? Best to stay off CHF pairs for now.

EURLFX:

  • Price formed a strong bullish engulfing pattern on the weekly charts near a predetermined support level
  • We can expect to see a retracement to as much as 2.5 levels
  • A break above 2.21 could see support being established and a possible rally to 2.5 and as high as 2.88
EURLFX Weekly Analysis – 02/02/2015
EURLFX Weekly Analysis – 02/02/2015

Conclusion: Going long on the Euro against weaker currencies for the short term will be an ideal trade.

GBPLFX:

  • The break out from the rising wedge channel saw price quickly hitting the projected target
  • The quick rally back to the break out level is also an interesting observation
  • Daily charts shows Friday’s candlestick in a doji, the appearance of this near the trend line is indicative of a shift in sentiment
GBPLFX Weekly Analysis – 02/02/2015
GBPLFX Weekly Analysis – 02/02/2015

Conclusion: A bearish candlestick on the daily charts will be conclusive to take short positions against the GBP pairs in the coming weeks.

LFXJPY:

  • Price eventually declined to the predetermined support zone
  • There is strong confluence of the 52 week moving average on the weekly as well as the 200 day EMA
  • On the daily charts price is held by the EMA along with the support zone and the lower support line of the price channel
  • All of these indicate a short term reversal
LFXJPY Weekly Analysis – 02/02/2015
LFXJPY Weekly Analysis – 02/02/2015

Conclusion: It is hard to estimate where the reversal in LFXJPY will take place. Best to stay aside until we see a clear reversal pattern emerge from the daily charts.

NZDLFX:

  • As noted three weeks ago, NZDLFX reversed from the resistance level and declined rapidly
  • Price is near the support/resistance level of 1.42
  • We could expect to see either a retracement back to 1.42 or a continued decline
  • Next support comes in at 1.37 but no major candlesticks formed on daily or weekly
NZDLFX Weekly Analysis – 26/01/2015
NZDLFX Weekly Analysis – 26/01/2015

Conclusion: Stay aside NZD pairs this week or short against stronger currencies.

USDLFX:

  • US Dollar continues to move higher with no signs of retracement what so ever
  • Price is close to 1.96 resistance level which could be reached this week
  • Daily charts show Friday’s candlestick as a doji
  • We could expect only a short term reversal before the uptrend resumes
USDLFX Weekly Analysis – 26/01/2015
USDLFX Weekly Analysis – 26/01/2015

Conclusion: Continue to remain long on USD pairs.

Prepared with LiteForex Currency indices

Ideal Currency Pairs to trade this week

Look for long positions in EURNZD on a retracement dip