Forex Weekly review- 13.08.2012

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).

 

It is possible to see how significant the 1.2290 price level is, for 5 weeks the price is passing it from both sides but cannot decide on the direction. At this point, after the last week, the price has stopped at this level. Breaking the 1.2290 price level followed by a breaking of the 1.2042 price level will sign the continuation of the downtrend towards the 1.1877 price level, which is the “Head and shoulders” pattern target (black broken lines). On the other hand, stoppage of the price on the 1.2290 price level will indicate that it is possible to see a correction of the last downtrend (blue broken line) in size of between a third and two thirds by Fibonacci.

 

  

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.

 

Just like on the weekly chart, we can see how the 1.2290 price level is used as the balance area while the price is passing it from both sides but stays around it without choosing the direction. Breaching of the closest resistance on the 1.2436 price level will probably lead the price towards the next re4sistance on the 1.2690 price level. On the other hand, breaking of the 1.2067 support level will probably lead the price towards the 1.1877 price level which was mentioned on the weekly chart review. 

 

  

 

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.

 

This is the 9^th week in a row that the price is ranging between the 1.5454 and the 1.5778 price levels. As long as the ranging period lasts longer, it increases the chance for a more aggressive breaking of the range. Breaching the 1.5778 price level is the breaking of the neckline of the “One in, One out” pattern (blue broken lines), while its target is exactly the next resistance on the 1.6170 price level. On the other hand, stoppage of the price at the current area will indicate that it is possible to see the price continues its range between the 1.5454 and the 1.5778 price levels, while only breaking of the lower ranging level should bring the price back to check the strong support on the 1.5270 price level.