USD ended up last week as expected, but the week was still weird and confusing. Mainly because many pairs were out of sync, so its not easy to make a prediction for next week. EU would normally look like a good short, but GU looks like a good long, at least short term, while UJ is still a short. The pairs that are correlated, were acting differently last week and I am always cautios when this happens. It is hard to imagine for GU to go up, UJ to go down and EU to go down at the same time. Some of those pairs was “wrong” this week and I need to wait for next week to determine which. GU and UJ are the reason why I wouldn’t short EU just yet. Another reason is that more than 60% of retail is still short…so it would be good to squeeze them out a bit more. EU is kind of in the middle…too high to go long and too low to go short. 30-50 pip scalps are good early in the week, but I prefer bigger setups than that, so I will keep waiting for the charts to be more clear. If my prediction is right and GU goes up next week, along with UJ going down, then EU should re-visit 1980 and if broken above, opens up 2050-2150 as good short opportunities. I can imagine market will be panicking by then and all the so called analysts will start “predicting” 1.25, 1.30 and more again, like last time at 1.23. That will be a good time to start shorting again, medium to long term.

My main pair to watch for the week remains UJ. We finally broke below 110 and since then tested the area many times, as you can see on the H1 and H4 chart. So 110 became resistance, which is a good sign for bears. We could re-test this area again next week, or even take a quick look above, but looking at the weekly chart, bears should take over anyway and break below 109. My target for the week is 108.50 or lower.

USD came very close to my target of 93.50 this week and now I think its time to go down. Short term, at least. EU is still within the planned range and found a strong support at 1750 today, shortly after strong NFP data. Volume wasn’t big today, since its Easter holiday, so its not easy to make conclusions based on today and monday will be most likely a slow day, too, but the price action gave me some idea what to expect next week, anyway. Retail now only sees EU shorts, all “analysts” tell people to short and even banks tell people to short EU…what could go wrong, right? I see something else…a bullish pattern building between 1700-1750 and the nearest problem is the 1785-1800 area, which was a strong resistance all week long. But if we take 1800 out next week, I expect EU to go well above that level. My first target would be 1870-90 and final target around 1940-90. I wouldn’t start shorting, if we reached the final target, though…first I would want to see if we break the strong resistance at 1990, which was created during a FED and ECB event some time ago. If this level is broken, next would be 2050-2100, where I would start looking for shorts again. All these targets seem too far away now, so lets take it little by little…1800 is an important level to break first. Below you can see the prediction from 2 weeks ago, its still valid for next week.

The other pair to watch is UJ, it is now overstreched beyond all logic and close to a big reversal area. I thought we will retrace towards 107, before breaking 110, but here we are at 110.70 and very close to areas, which “produced” big drops last time they were hit. The first one above 112 ended up with a fast UJ dump of 1100 pips and the second above 111 ended up with a 900 pip drop! Now we are above 110…so buying would be very risky…there is only one trade on UJ now and its a short…the only question is not IF, but only WHEN and HOW MUCH it drops. I think 107 is still a good target and 105 as a very likely target to be hit, too.

In march, Biden’s administration signed bills to spend almost 4 trillion dollars, first 1.9 trillion mid march and now the so called 2 trillion infrastructure plan, even though don’t know what infrastructure will be build with the money. But what we do know is that the FED will have to print another 4 trillion, inflation will go up and dollar will most likely keep dropping for a while. I would still buy USD, if the index goes back towards 89-90, but not much before that. So the EU long and UJ short are both technical and fundamental trades at this point.

Dollar index is stuck in a tight range between 91.30 and 92.00 and I still expect a break upside, as predicted 2 weeks ago on the chart below.

But it might not come right away, because EU is showing some signs of bullishness below 1900, at least in the short term. The problem is, 1990 was strongly rejected after both ECB and FED, formed a nice double top on EU, so I would target around 1950 on EU for now, just to be safe and look for bearish momentum there or a little above. My EU target is still 1770, but looking at the chart, the area around 1730-50 might be a good long entry, again just short term, but still.

EG was a pain in the ass last week, even though it confirmed its bottoming and now ready to take off and spike up, PA last week was very annoying, so I will leave the pair alone for now and just use it to analyze EU and GU trades. If EG really spikes up, GU should make a good dive, towards 36xx or less. If it starts dropping, do not try to “catch a falling knife”, might be nasty.

Even though US dollar had a nice bullish candle last week, UJ finished the week with a bearish candle. UJ is “overbought”, even if I hate that term. So, if USD continues its upmove next week, UJ might still go up a little, but it has troubles to stay above 109, so it will be sold most probably, anyway. And if for some reason the big boys want to spike it to 110, there should be enough short orders there and enough stop-losses above, to make it drop towards 106.xx, or at least 107.xx. And if USD starts the week bearish, UJ will drop right away. So bears are still fine, with a proper money management, even in case of a spike up, before the move down. To me, 106.90-107.50 is a safe target, no matter what happens fundamentally.

This past week, EURUSD has reached my past targets, except the one at 1770, which will still happen later, but I am not going to focus on it now. EU is still a short trade, medium to long term, but short term it will be most probably ranging, before it breaks out again. I will wait for the reaction of 2000 or above, if it happens. BUT, looking at the EG chart, that looks to be the easiest trade for the coming weeks, with a SL below 8500, to be safe. If nothing extraordinary happens next week, 8550-8565 is a good area to get into longs. First bigger target is 8710 and the final target is 8850-8900, but that will take some time, most probably. Why is this EG chart so important? Because if it works out, it will make the shorts on GU much better than shorts on EU. While on EU, the small range might be good for 50-100 pips, on GU, the short targets are HUNDREDS of pips away. So I am favoring GU shorts in the coming weeks, over EU shorts.

The next good pair to watch is UJ, as bulls need to correct some, before they break the strong trendline, which you can see on the monthly chart. I think, we will see 107 minimum, but if I wanted to go long, I would rather wait for 105 or close to it, to not enter too early. There is a possibility that it will break the trendline first and then turns bearish. My 2021 target for UJ was hit this week, much earlier than I expected, so I will be trading the ranges the pair creates from now on. So, if we have a spike towards 110 this week, before a meaningful correction below 108, I will be bearish on this pair until 105-107. Either way, bears should be fine now at 109, if they are not too greedy and don’t hold for too long.

Next week we have FED on wednesday, BOE on thursday and BOJ on friday, with many smaller fundamental events in between, so the volatility should be good, for both bears and bulls on all pairs!

This week, USD hit my first target of 92, but there should be a little correction, before it resumes the uptrend towards 94-95. First reason is friday’s PA after NFP release, where bulls didn’t do much anymore, even though the numbers were outstanding and the second was the strong London fix topping on the same day. In other words, bulls looked a bit tired, after a strong week and now need to rest a bit, before they take over again. ECB week is perfect for that. EU did a quick dip below 1900 and instantly resumed above and afterwards did some heavy bottoming around 1905-1910. That makes me believe that it will retrace a bit next week. Its hard to say if we’ll have a “typical” ECB week, with EU going up all week and then dropping on thursday, or if its going to be a range week. I can see 2000-2015 to be hit again and thats where I would be looking for shorts again. Other than that, it will be safe to wait until thursday and plan the biggest trades for then. The chart will be more clear by then also.

USDCHF was the bigger gainer this week. It definitely needs to correct some, but I wouldn’t hold the shorts for too long. 9300+ is a good spot to short scalp, though. In theory, I can see even 9140 to be re-visited again, but its probably safer to wait for 9200-9220 only, maybe 9250 even. The best time to be long on EU and short on UCHF should be early in the week, after that I would just let it be and wait for ECB.

UJ started a strong uptrend and almost hit my 2021 target, even though I thought it will take months to get there, as seen on the chart below, from january. Anyway, its a good time to short scalp it early in the week, too, most retail traders started shorting around 106, so shorting now, above 108, is much less risky. But short term only, UJ still has room to go to the upside.

US dollar made another move below 90 this week, just to reject it strongly, maybe for the last time. My target of 94-95 now looks to be near, so this week might be good to look for good entries on EU shorts. On UCHF, my target of 9100 was hit this week, so I will leave this pair alone now and focus on the others, which didn’t make their big move yet.

The biggest surprise last week was the jump on pound of over 100 pips during asian session, which didn’t move EU at all, at the same time. I suppose, it was the only way to end this bull trend, to wipe out as many shorts as possible, before a big downmove. Looking at the chart, 3450-3500 now looks as a good level to wait for, even though GU was showing some signs of bullishness on friday, after breaking 3900, so a little retracement may be in the cards.

AU and NU had the biggest daily bear candles on thursday and friday after a long time. When it almost seemed impossible to stop the bull on AUD&NZD, 8000 did the trick on AU, where smart money had obviously a lot of orders placed. It took a long time with fundamentals to catch up with technicals on these pairs, but they should be both in bearish mode now, so definitely too risky to start buying at the moment.

The main pair to watch next week is EU. The week closed at 2070, a little overstreched bearish move, so I am expecting a little correction upwards first. London fix was 2140 on friday, very strong bearish action at those levels, so that would be my first place to look for shorts, if it manages to go up there. Second would be 2160, which was London session top and third 2185, which was asian session top. So early in the week, it will be interresting to watch how high bulls can take it, before bears take over again. Bear targets are still the same, 1920 and 1770, and we might finally be heading for them!

I didn’t make an analysis last week, because I didn’t expect much to happen and sadly I was right. The USD chart is pretty much the same where it was one week ago. The channel I posted, is still valid and the USD bottoming got only stronger. The only interresting thing this week was to watch which pairs perform better or worse to the US dollar. UCHF was holding the best and the weekly chart is now very bullish, so that might be the best trade into next week, if the pair is able to break and stay above 9000 early in the week.

The opposite pair was GBPUSD, where USD was the weakest and pound overstreched the move by a lot, breaking 4000. A correction here is still in the cards and 3690 should be a doable target, but I still feel its going to break the uptrend channel now and target 3450-3500 eventually. Fundamentally, there is nothing positive going on in Europe, even though UK might have a little advantage into the future. Monday will be important for the pound…if London breaks 3950 and stays safely below it, the downmove for the week should be confirmed. Its the last week of the month and we know pound is doing strong one-way moves into the end of the month…and bears might take the upper hand now, after the overstreched move from the last 2 weeks.

Euro is somewhere in the middle, copying the USD chart almost exactly. We are still seing many news about a weak dollar and I can’t help but feel like the market is playing with traders at the moment. We came back towards 90 so many times now, it feels like the big boys are trying to discourage retailers, before they start the big move. Thats why I am cautious with selling the dollar at these levels and prefer to wait for a spike up. Since the USD bottoming is now taking longer than I expected, my long target will increase, too. As, the longer we bottom, the higher it will go, once the range is played out. First target remains 92.50-93.00, but now I wouldn’t be surprised with a strong move above 95, once this bottoming is over. Probably something to look into for the next few weeks.

This week worked out very nice, with the promised dollar squeeze from monday until thursday, with a retrace on friday. The most important for EU bears was the fact that not only 2100 was finally broken, but also 2050 was broken, a support level which was holding for over 2 months! Even with the big retrace on friday, bulls still didn’t manage to break above 2050 and the area needs to be watched early next week also. If bulls manage to stay safely above it, EU might give good short opportunities above 2200 again. If bears manage to stay under, my next bear target will be 1880 and finally 1770.

We will need to figure out if friday’s upmove on EU was just profit taking or a short term reversal attempt. Looking at the dollar price action on the 5m and 15 charts, it looks like profit taking to me, so early next week, dollar should climb back up and re-test its highs from this week. The question is which pairs to focus on and I decided to focus on GBPUSD. Looking at the EG chart, there might be a correction towards 8950-9000, which is not a little one. If EU will be struggling within the current range, GU will be the pair to watch for a drop. Of course, knowing GU, there still might be a spike up on monday, but eventually it should go down towards 3450-3550. There are no big events next week, so moves should be more technical than fundamental. We need to watch the USD chart and how it reacts above 9150, if it gets there, of course. But my USD target is still 9250-9300, so no need to jump on the short side just yet.

I feel that something big is coming…and it will come soon. Looking at EURUSD, it looks bullish on the H1 chart, had a tough time to stay under 2100 last week, BUT that doesn’t mean I think its safe to buy it at this moment. Since the EU chart is a little misleading and telling different stories on different time frames, maybe other pairs and the dollar itself will help to solve this puzzle. Let me start with the dollar…looking at the 15m chart, there was a heavy bottoming during London fix and since it was friday and the last day of the month at the same time, this is meaningful. It can easily happen that this bottom can last through all february and dollar can do a big short squeeze. I wouldn’t look into dollar shorts at all, until I see 93, at least and the reaction there. And it is also important to look at other USD pairs, which are all somehow correlated to EU, some more, some less, but if all go one way, EU will have a hard time to go the other way. Especially when the fundamentals are strongly against technicals at this point. The risks for EU in february are the neverending lockdowns, collapsing businesses, shortage of vaccines, which is a big issue, since it creates a bigger uncertainty as there already was and if that wasn’t enough, we now have a political crisis in Italy, with the possibility of new elections. Yet, I see many retailers buying EU and not even looking at the other side, but thats in general the problem of retailers, even so called retail “gurus”, who get so used to trade in one direction, they can never see the other. The same people who are buying now and say that even 1.18 is a crazy thought are the same people who were heavily shorting EU at 1.08 and thought people who expected 1.10 were crazy.

The important pair to watch next week is USDCHF, lurking below the strong resistance of 8920, which is there for 2 months now. Until now, it has been a good scalp short everytime UCHF went above 8900…this friday, it managed to stay safely above this level after the London fix bottoming, which is a good sign for bulls. Here is the thing about a long bottoming or topping…the longer it takes, the bigger the move afterwards. Now, after 2 months of bottoming…if bulls manage to break and stay safely above 8920…what do you think will happen? Retailers, so used to short this pair…will short the first spike up…it will retrace down a little…and then spike higher…they will short again…and the move up will become stronger as it accumulates retail shorts on the way. And that will be the dollar squeeze I am waiting for. So, if you see this move starting…I would advise not to short it, it may become a bloodbath for dollar bears.

p.s. There is a bearish divergence on EU monthly chart. 😉

Last week I talked about entries on many USD pairs and we reached good entry zones on all. On EU, we reached entry zone 2, didn’t make it all the way up to the 3rd, which is above 2220. Next week is FED week, so I hope we get better volatility than during ECB, which only gave us a pathetic 30 pips range to work with. EU can still go a bit higher before wednesday, but I wouldn’t go long below 2200, anyway. The main reason for it is the dollar chart and a similar patterns and price action as we saw at 100, actually, the bottoming around 90 seems even stronger to me than the topping that occurred around 100. Even though its hard to predict months or even years into the future, looking at the chart, we might be at a point of very good long term entries. On the daily chart, bulls are getting really angry, just from watching the PA, so if it starts going up, it might be strong, fast and without corrections!

p.s. I only added the monthly chart to piss off dollar bears a little. 😉