Daily Technical Analysis

Daily Forex Technicals | Written by FX Instructor | Jul 24 09 02:56 GMT |

EURUSD Outlook The broadening formation I showed you in the last 2 days give us a good suggestion of a volatile market where price make new highs and new lows without a clear direction and keep me stay away from the market, which proved to be the best thing to do now. Some guys asked me about my CCI set up. They thought that my CCI set up is good and try to find some 'secret' in it. Of course, CCI is a great indicator, simple but powerful. However, it's not my 'secret' or a 'holy grail'. I don't use CCI to determine the trend, because I believe that is not the function of the CCI (or any indicators). I use it to find potential momentum, breakout/breakdown, rebounds etc. I depend on chart patterns to determine the trend, bullish, bearish or trendless. So I only trust my CCI when it support or confirm my chart patterns. If not, I don't trust it. The current situation is one good example when I don't trust my CCI. On daily chart below we can see that CCI is just crossed the 100 line down. The interpretation is that the pair has a big probability to make a bearish momentum to the downside. But, the broadening formation suggests that we have no clear direction yet and the facts in the last 7 weeks support that conclusion. So, right now I don't trust my CCI. Of course, I am not saying that the pair won't go south, but when my indicator conflicting with my chart patterns, I prefer to do nothing. Keep stay out from the market and good luck. GBPUSD Outlook Similar to EURUSD, the GBPUSD had volatile market without a clear direction. The pair attempted to push higher, topped at 1.6584 but further upside pressure was rejected as the pair closed lower at 1.6485. I don't know how long you guys can stay with no trade condition, but I will keep stay out from the market as long as it shows no clear direction and still trapped in 1.6660 - 1.6000 area. I don't care if it takes weeks or even months. This is not about predicting the direction, but the mindset of how I stay discipline with my system and protect my capital, which much more important than any 'prediction'. Remember, market will always reward patient traders. Good luck . USDJPY Outlook The USDJPY had a significant bullish momentum yesterday, topped at 95.28 and closed at 95.01. For me, this fact is a violation of my bearish medium term. The bias is bullish in nearest term. However we seem to have good resistance around 95.30 area. In my opinion, only a clear break above that area should trigger further bullish momentum and give us a buy signal targeting 96.05. CCI in overbought area and heading down so watch out for a potential downside rebound testing 94.60. Break below that area should lead us into no trading zone. USDCHF Outlook The USDCHF had a bullish momentum yesterday, topped at 1.0771 but closed below 1.0750. On daily chart below we can see that it seems like the trendline support is doing a good job preventing further bearish attack. The bias is bullish in nearest term but we need a consistent move above 1.0750 - 1.0800 area to have potential further upside momentum testing 1.0950. Failure to do so might lead us back towards 1.0620 area. EURJPY Outlook The EURJPY had a moderate bullish momentum yesterday. The pair topped at 135.60 but closed lower at 134.46. On h4 chart below we can see that this was a case of a false breakout from trendline resistance. I think we are still in no trading zone and do not rush jump into the market since we have no confirmation on bullish scenario yet. Immediate support at 134.20 - 133.80 area. Break below that area should trigger further bearish momentum. Initial resistance at 135.60 (yesterday's high). Consistent movement above that area should be seen as bullish confirmation at least towards 136.70 area. CCI about to cross the 100 line down on h4 chart suggesting potential downside rebound. GBPJPY Outlook The GBPJPY had a significant bullish momentum yesterday. On daily chart below we can see that we have a breakout on trendline resistance suggesting potential bullish outlook. The bias is bullish in nearest term targeting 158.50. However CCI in overbought area and heading down on h4 chart so watch out for potential downside correction testing 155.20 support area. Break below that area should cancel the bullish scenario. The market has been very tricky lately so use only tight money management at this phase. AUSUSD Outlook The broadening formation I showed you yesterday gave us a good signal to stay out of of the market. We had a volatile market without clear direction where price whipsawed to the downside, hit the bottom (0.8105) after hit the top (0.8221). Until we have more significant movement, let this formation be our guide for now to keep out of the market. 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