Weekly analysis | 18 April 2014

EUR/USD

Monthly chart: so, we see two contending factors here - ADX/RSI are growing (1,2), which belongs to the trend's signs, but March pinbar is still in action (3). Right now the price is located around the area of the pin's 50% (which usually marks start of such set up). But attraction of the upper Bollinger band also presents (4, 1.4069 point). It is obvious that touch of this level will make the pinbar “dead” and trend character of further growth of Euro will be confirmed and provided thereby. Upon that, a considerable middle-term target will be 1.4964 point (5). If downward movement starts from current levels, the middle Bollinger band (6, point 1.3273) will become the target.

Weekly chart: ADX (1) is undergoing correction against a growing oscillator (2), which more often signifies about the last upward rollback prior to a further downward movement. Oscillator's divergence (3) also speaks for the Southern tendency. Resistance from the middle horizontal Bollinger band was reached (4, point 1.3957), thus, if sellers win, Euro's decline must start immediately after the week's opening with the target on the bottom Bollinger band (1.3476).

Day chart: ADX also grows here, but below the point of "30" (that is to say, character of growth on this frame does not belong to the trend) Horizontal upper Bollinger band (2, point 1.3936) act as the line of resistance. Also it is important to note about the local bearish O&U pattern (3), which was used for entrance at the last week's closure. Therefore, the chart we are describing now can possibly confirm Southern scenario.

Conclusion: main scenario is Southern. It means decline of the pair from current levels to the points of 1.3694, 1.3476 (and target for 1.3273). Another option is Northern scenario. Such options means that we will witness touch of 1.4069, a slight rollback and continuation of bullish pressure with the target at 1.4964.

GBP/USD

Monthly chart: here we see a very active trend's phase from ADX/RSI (1), which, being put along with March inside (2), provides the week with potential of growth at least to the upper Bollinger band (3, point 1.7051) and middle-term target at 1.91 (4). The same scenario may include a preliminary correction of the price to the middle Bollinger band area (5, point 1.6012)

Weekly chart: ADX/RSI connection (1) is growing, but ADX is below "30". Taking into account a horizontally located upper Bollinger band (3, point 1.6811), we can assume that the price will undergo through a downward correction to one of two key resistance lines: middle Bollinger band (3, point 1.6479) and ascending bottom band (4, point 1.6242), where a considerable pivot is also based. Break of bullish scenario is also located in the area below 1.6242 and is painted by a gray arrow.

Day chart: a technical correction from ADX/RSI (1) is seen here, so we can wait for the rollback to the middle Bollinger band (2, point 1.6625), or two the significant pivot at 1.6479 (point 3). Below bearish tendencies will dominate.

Conclusion: so, main scenario is a growth but with a preliminary rollback. Targets of rollback: either 1.6625 or 1.6479. One of these areas will provide birth of long-signals and buy the pair to 1.7051 (to 1.91 in the long run). Another option is the break of up-tendency (less probable scenario). Alternative is the growth without correction – is rather more probable) For that bears must take the pair below 1.6479, which will create potential for decline down to 1.6242, 1.6012 and 1.5258 in the middle run.

AUD/USD

Monthly chart: ADX/RSI connection is in the status of technical correction (1) with the middle Bollinger band as its goal (2, point 0.9717). If bears start to force the pair to move down from here, the bottom Bollinger band will be the target (3, point 0.8386).  Break of the descending trend for AUD can be diagnosed if break up above 0.9717 happens (gray arrow). 

Weekly chart: here is a strong trend pressure upwards from ADX/RSI (1). Upon that, growth surely confirms convergence of the oscillator created on decline (2). It means that touch of pivot 0.9717 (3) will take place to all probability. If bulls confirm their aspirations for continuation, correction to the area of the middle band is possible (4, point 0.9027) and then a middle-term potential of growth to 1.0764 will be obtained.

Day chart: a very strong potential of ADX, but oscillator (1) is overbought and has to be recharged. A probable correction downwards will be met by buyers on support lines from the middle Bollinger band (2, point 0.9209) either from the bottom one (3, point 0.9027)

Conclusion: main scenario is touching of 0.9717, rollback to 0.9209 and probably to 0.9027. Also there can be a mirror option: rollback from current points to 0.9209 (or 0.9027 in case of deepening) and then a dash upward movement to 0.9717.