Weekly Currency Index Technical Analysis – 2 March

Currency Index Notes:

From last week’s analysis, we had recommended to buy the dips on GBPUSD, AUDUSD and NZDUSD while taking a short term long position for the first part of the week. GBPUSD gained 0.25%, AUDUSD lost -0.63%, NZDUSD gained 0.58% and AUDJPY was practically unchanged at -0.08%. NZDUSD continues to be the biggest winner since our recommendation to stay long from 16th February. In total NZDUSD gained 1.13% for the period.

Australian Dollar Index:

  • Although the currency index is trading above the short term support at 1.5128, the candlestick point to indecision
  • From the daily charts, we noticed a dip to the support last week and we expect the Australian Dollar to rally this coming week
  • The rally could potentially be capped near the resistance level of 1.54 – 1.534 levels
Australian Dollar Index Weekly Analysis – 02/03/2015
Australian Dollar Index Weekly Analysis – 02/03/2015

Conclusion: Stay long on AUD against weaker currencies for most part of this week

Canadian Dollar Index:

  • The Canadian dollar index managed to reverse from the past few weeks after falling sharply
  • Last week’s candle closed with a bullish engulfing and we expect the Canadian dollar to remain strong this week
  • From the daily charts, price has rallied above the 100% Fib level and we expect further upside moves on the cards, towards 1.59 levels eventually
Canadian Dollar Index Weekly Analysis – 02/03/2015
Canadian Dollar Index Weekly Analysis – 02/03/2015

Conclusion: Stay long on CAD but only against weaker currencies. This could be a start of a few weeks of broad strength in the Canadian dollar.

Euro Index

  • The Euro currency index failed to hold on to its gains from the bullish engulfing candlestick few weeks ago
  • Last week’s bearish close comes after a doji near a support/resistance level which indicates a continued downside move but which is supported near the lower support level at 2.165
  • Only a clear break below the support zone at 2.155 will see a bearish momentum taking shape
  • For all we know, Euro Index could briefly dip to the support level and then build new bullish momentum
Euro Index Weekly Analysis – 02/03/2015
Euro Index Weekly Analysis – 02/03/2015

Conclusion: Stay short for the very short term in the Euro crosses as we suspect a shift in bias in the near medium term.

Sterling Index

  • The British Sterling followed through with the doji from the week before with a bullish candle close
  • If the bullish momentum continues the Sterling index could aim for the resistance level at 3.02 before falling back down to the main support at 2.96
  • Alternatively, the Sterling Index could head lower first and then attempt to break out from the resistance level
  • There are no clear indications from the daily charts which shows that price action could head anywhere
Sterling Index Weekly Analysis – 02/03/2015
Sterling Index Weekly Analysis – 02/03/2015

Conclusion: Stay away from the British Pound this week against stronger currencies or book profits on long positions established previously

Yen Index

  • The Japanese Yen is starting to show signs of break out from the consolidation triangle pattern formed on the daily charts
  • If this break out to the upside is successful, we can see a minimum price target of 61.185 being reached quite easily
  • The short term rally is however a correction and we expect price action to eventually head lower to 60.66 in the medium term
  • Weekly candlesticks have been in a tight range for three weeks so far so a break out looks more and more likely
Yen Index Weekly Analysis – 02/03/2015
Yen Index Weekly Analysis – 02/03/2015

Conclusion: Look for short positions in the Yen this week against stronger currencies

Kiwi Dollar Index

  • The Kiwi Dollar is almost nearing the end of its retracement rally with price just a few pips away from the noted levels of 1.4731
  • We think its time to exit long positions in NZD currencies but we need to wait for a bearish signal before taking short positions in the Kiwi
  • Daily charts continue to show bullish momentum so it would be best to look to the daily charts for signs of a bearish reversal candlestick pattern before taking short positions
Kiwi Dollar Index Weekly Analysis – 02/03/2015
Kiwi Dollar Index Weekly Analysis – 02/03/2015

Conclusion: Look to exit long positions in NZD crosses and wait for weakness to build up before going short

US Dollar Index

  • Our bearish bias on the US Dollar would have been validated if last week was a bearish candlestick
  • But with a bullish candlestick being printed last week and price overshooting the marked resistance level at 1.939, we expect that the US bulls are back in business
  • The bullish view would be confirmed however if we see this week to end up in the green as well
  • Daily charts shows a bullish engulfing pattern on Thursday with Friday’s candlestick showing indecision
US Dollar Index Weekly Analysis – 02/03/2015
US Dollar Index Weekly Analysis – 02/03/2015

Conclusion: Stay aside USD crosses this week or wait for a bullish candlestick on the daily charts before taking long positions

Prepared with LiteForex Currency indices

Look for long positions in AUDJPY (maintaining this view from last week’s analysis), take new long positions in CADJPY, buy AUDNZD.

Sell EURAUD and EURCAD

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