Weekly Forex Techincal Analysis March 08 - 12
The currency strength meter can tip you off to several trading situations you should be aware of, such as the strength and weakness of a currency in relation to other currencies.
The past week was negative for the euro against the US dollar. The single European currency has significantly lost its positions, as a result of which the oscillator is in the oversold area, and the histogram is testing the minimum values for itself. The same applies to the price. Therefore, we can talk about the emerging divergence of the movement, but taking into account the combination of factors, we can expect that the current point is extreme for the current movement. Hence, bull trading options can be considered.
The upward dynamics for this currency pair was interrupted, as a result of which the price was below the trend line. Please note that the downward movement continued after that and it reached the level of the moving averages. This level has been tested twice. Moreover, the most important characteristic is that the testing of the level of moving averages almost coincided with the level of 1.3850. The last level is very significant. Please note that testing the level indicates horizontal points on the price chart, but if you look at the indicators, there is an upward movement hanging down. Consequently, there is divergence, which means we are trading up.
Last week, the dollar strengthened its positions very strongly against the Japanese yen. This can be seen both in the price chart and in indicators. If you look at the indicators, then all of them are at their local maximum values. This can be seen especially clearly in the oscillator, which has been in the overbought area for a very long time. Please note that the upward movement has raised the price to an important psychological level, which means that, taking into account the combination of factors, we can expect a downward correction and open a downward contract.
Basically, the sideways movement prevailed in the Australian dollar against the US dollar last week, although the volatility was decent. The focus is on indicators, primarily the oscillator, which initially tested the oversold area and then indicated an upward movement. As for the histogram, it tests the minimum values for itself and repeats the previous descending top. At the same time, the price tested the level of 0.7634 twice. The downward movement was not enough to break this level down, so an upward rebound can be expected.
The past week led to a fairly strong growth of the US dollar against the Canadian dollar, as a result of which the price of this currency pair was again squeezed within the range with the boundaries of 1.2642 and 1.2774. Please note that when moving up, the price found a correction twice, which coincides with the levels of the moving averages. If you study a longer plotting interval, then this level worked out at least 5 times. Therefore, we say that if the price turns out to be above the level of the moving averages, then it will be possible to trade up. Otherwise, we wait for the price to break the range down and trade for a fall.
The dollar against the Swiss franc is another asset in this weekly review, where the dollar has made a very strong upward movement. There is a clear uptrend here, which is clearly visible both on the price chart and on indicators. All indicators are at their maximum values, and the oscillator practically does not drop out of the overbought area at all. The histogram constantly updates its maximum values. The price also constantly updates its maximum values, simultaneously breaking through the levels. The only thing that can be said now is that it may need a correction, especially considering that the price has moved very far from the level of the moving averages. Therefore, a downward correction can be expected, but this trade is very risky.
The development of the price for this currency pair mainly occurs within the side corridor with the borders of 73.32 and 74.80. The absence of a clear trend is also confirmed by indicators that are close to their neutral values and even if they move away from them, this does not happen strongly and for a short time. Therefore, now we must say that the price is close to the upper level of the side channel border, and at the same time the level of moving averages is looking down. Therefore, there are all the prerequisites for opening a downward contract.
The price of gold continues to fall and last week it dropped to the level of 1688.958. The downward movement is very strong and it is already global in recent months. This is clearly seen in all analytical tools. Nevertheless, now an interesting fact can be noted that the price continues to fall and continues to update the minimum values for itself, but the last tops contradict the indicators. The histogram and oscillator are already looking up. Taking into account that the market is testing an important level, we can expect that the current divergence will work out and this allows opening an upward contract.