Forex Weekly review- 6.8.2012

The price has descended during the last month towards the 1.2230 support level but closed the candle above this level. Breaking of this level and closure of the price under this level will probably lead the price towards its last low on the 1.1877 price level. On the other hand, stoppage of the price at the current area and it is possible to see a technical correction of the downtrend which started at the 1.3500 price level.

The last candle is a reversal candle which is called “Engulfing” (a candle that completely covers its previous), while in addition to that, it closed above the 1.2290 price level which is used as a support level at the moment. Another green candle will approve the reversal of the trend and it is possible to see an ascending move for a correction of the last trend which started around the 1.3500 price level, this correction will probably be in size of between a third and two thirds by Fibonacci retracement. On the other hand, in case the price will go back under the 1.2290 price level, it will be possible to assume that it will continue its movement towards the 1.1877 price level, the “Head and shoulders” pattern target (red lines).

The last candle has opened above the 1.2290 support level and descended during the week, but did not break the low of the previous candle. Now it is possible that we will see an ascending move that will correct the last downtrend which started around the 1.3500 price level (blue broken line), in size of between a third and two thirds by Fibonacci. On the other hand, in case the price will go back under the 1.2290 price level, it is possible that the price will continue its way downwards to the 1.1877 price level, the “Head and shoulders” pattern target (red lines).

Indeed the price has reached the “One in, one out” pattern target (red broken lines), while at the same time it is possible to notice the creation of the “Wolfe waves” pattern (brown background) and the price has reached its target (crossing of the price with the line connecting between points 1 and 4) on the last 3 trading days, currently the price is located exactly on this target. In addition, the price has corrected the last downtrend which started on the 1.2692 price level by 50%. Breaking of the 1.2050 price level will probably continue the mentioned uptrend and suppose to lead it to a crossing with the upper Bollinger band.

The last two trading days of the last trading week were very volatile while first the sellers were able to push the price down followed by a success of the buyers to bring the price back to the previous day peak. Breaching the 1.2436 resistance level will create for the first time an ascending price structure that can lead to another checking of the 1.2692 resistance level. On the other hand, stoppage of the price at the current area and its move back under the 1.2050 price level will probably lead the price towards the 1.1877 price level.

The price is located under the Bollinger’s moving average (Bearish market) but still in the center of the triangle and continues to converge within. Breaking of the lowed rib and the 1.5200 price level will probably lead the price towards the next support at the 1.4200 price level. On the other hand, in case we will see a closure of a candle above the Bollinger’s moving average, is it possible that the price will check the upper rib of the triangle again.

The price has reached the upper ranging level at the 1.5778 price level, breaching it will sign the breaching of the “One in, one out” neckline (blue broken line), while the target of this pattern is exactly the next resistance on the 1.6170 price level, on the other hand, stoppage of the price at the current area will probably continue the ranging period between the 1.5454 and the 1.5778 price levels, while only breaking of the lower ranging level is suppose to lead the price the strong support on the 1.5270 price level.

As it was written in the last week review, the price did stop at the 1.5788 upper ranging level, descended to the lower ranging level and closed in the middle of the range between those levels. Breaching the 1.5778 which is the neckline of the “One in, one out” (blue broken line), with a target exactly on the 1.6170 resistance level. On the other hand, stoppage of the price at the current area will probably continue the ranging between the 1.5454 and the 1.5778 price levels, while only breaking of the lower ranging level is suppose to lead the price to check the strong support on the 1.5270 price level.