Forex for the week of July 21, 2014

The markets in general have seen a bit of volatility recently, but in the end, a lot of the old levels still apply. The two most obvious pairs are the EUR/USD and the USD/JPY markets. The pairs both are challenging significant support levels, and as a result we feel that a bounce could be coming in the short-term. The markets should start to calm down a bit overall though, as the summer months tend to do that. The following two charts show what we are looking at, and we are bullish of both of these markets.

EUR/USD daily

The EUR/USD pair formed a nice hammer at significant support, and we cannot think of a better sign of potential buying pressure.

USD/JPY daily

The USD/JPY pair didn't have a candle set up like the EUR/USD, but is still at a significant support level, and it seems that the market is going to bounce from here.

While there are plenty of other markets out there that could be traded, but in our opinion these markets represent the “cleanest” trading opportunities this week.

This week:

Mon – AUD Speech by Gov Stevens

Tues – USD Core CPI

Weds – GBP Interest Rate Decision, NZD Interest Rate Decision

Thurs – GBP Retail Sales

Fri – USD Core Durable Goods