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.