Weekly Overview on Majors' Price Action

EURUSD - Played by the rules

Last week EURUSD played by the price action and technical analysis rules. Its price bounced from 1.1000 and retested at 1.1100. After FOMC announced a high probability for the interest rate to hike in December, the US dollar has gained across the board. EURUSD plunged 200 pips and tested the next round number support from 1.0900. Currently the price of this currency pair is trading above 1.1000 again.

The waters seem to have calmed and the market is free to move higher during the week, at least up until Friday when a new NFP is scheduled to be released. I expect the price to break above 1.1100 and head toward a 50% retrace (1.1200) out of the entire drop. A break above this level could trigger a continuation of the rally towards the 61.8 Fibonacci retrace. An alternative scenario would be for the price to continue moving sideways in between the upper limit from 1.1100 and the lower limit 1.0900. Breaking below the current support could bring in more bears, which would push the price towards the next round level (1.0800).

USDJPY - Nothing spectacular, yet!

The USDJPY began trading in a 300 pips range on 25th of August. Although it had a couple of opportunities to break out of this sideways move, the price was dragged back inside really fast. The range has an upper limit of 121.37 and lower limit of 118.63. After the last false breakout the from 15th of October to the downside, the price began to move up again. Bulls tried their luck  to break the upper limit with no success.

The price is now trading below 121.37. During the past week it drew a new and smaller sideways move. The local support is set at 120.14 while the resistance is the same as the bigger range. A break below the current support would signal a drop back to 118.63. A break above 121.37 could result in another false break. Traders should consider this if they intend to trade the breakout. Buying or selling the pullback might be a better strategy when it comes to this currency pair.

USDCAD - Is this a the beginning of a downtrend?

In the last weeks overview, I anticipated the USDCAD to move higher and retest 1.3320. It moved higher but did not reach that far. The price dropped and plunged below 1.3100. On the 28th of October, the price break below the uptrend line, which can be seen on the 60 minute chart, but ended up being just a false break. This was the first bearish signal, followed by a Lower High and a Lower Low.

The current price action is not yet totally bearish. This move down, although larger than the rest, might end up being an ABC corrective movement. To say that a new downtrend is in place, another Lower High will be needed and a Lower Low. A good resistance area is found between 1.3144 and 1.3165 (the range between the 50% and 61.8 Fibonacci retrace of the latest down move). A break above this area would lower the probability for the price to continue moving down.

AUDUSD - In a down trend

The Rising Wedge about which I was talking last week has been invalidated by the fall of the price. An alternative scenario was triggered by the drop below 0.7200. The price fell to 0.7065. From here it bounced back and rallied towards 0.7150. A strong resistance is found at 0.7200. However, the bulls might not have enough power to push the price all the way there.

The latest up move looks like a Rising Wedge. If the price breaks and closes on a 60 minute chart below the trend line and also below the local support from 0.7120, I anticipate a drop towards the latest low from 0.7067. This bearish scenario can be invalidated only by a bounce from the local support and a rally above the current highs, the up move targeting this time  0.7200.