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.