Weekly Market Analysis - July 13, 2021

Huzefa Hamid

Profits get bigger when you’re prepared for price movements. Join us for a closer look at the Forex markets and the major Forex pairs for the week of July 12, 2021.

 

I consider myself a technical trader, which means I use technical analyses and price charts instead of news items and economic indicators like interest rates, CPIs, etc. However, I do make sure to always start off my analyses with a glance at the economic calendar, so I can gauge the direction of the markets and what is moving them. 

Another thing that I think is important to do when conducting a market analysis is setting your timeframes and knowing how to use them. Personally, I split my timeframes into what I call “higher timeframes” and “lower timeframes”. Any chart that is from the four-hour timeframe or longer I consider to be a higher timeframe, and any chart from one-hour or below I consider to be a lower timeframe. I then use the higher timeframes for my technical analyses and the lower timeframes for my actual trade execution when I’m looking for a good trade entry.

Let's jump in to our weekly analysis of the major Forex pairs, starting with the EUR/USD.

EUR/USD

On the weekly chart, the uptrend that started in early 2020 has stalled as the price reaches a previous resistance formed in early 2018:

EUR/USD Weekly Chart

This resistance also is in a significant 50-61.8% retracement zone. The price made a lower high this year, giving it a nearly double-top formation.

EUR/USD Daily Chart

The price tested 1.19573 as resistance on the daily timeframe, which has acted as a resistance and support over the last 12 months. The next support levels the price could reach if it continues trending down are 1.17041 and 1.16121.

GBP/USD

GBP/USD Weekly Chart

The GBP/USD is in a similar state to the EUR/USD, with its uptrend that started in early 2020 now slowing down as it comes in the same region as resistance made in early 2018. That resistance level is also at a significant 50% retracement level.

On the daily chart, a double top has formed at 1.42410. The 1.4005 level is now resistance again:

GBP/USD Daily Chart

USD/CHF

USD/CHF Monthly Chart

The USD/CHF bounced and created a support level at 0.87576 earlier in 2021, which aligns with a previous support in 2014.

On the daily chart, the price has the potential to retrace to 0.90458 and even 0.89261 before resuming a bullish path:

USD/CHF Daily Chart

USD/CAD

USD/CAD Monthly Chart

The USD/CAD recently bounced off a support level made in 2017 at 1.20613, and the price could be reversing the previous 18-month downtrend.

On the daily chart, the price has made a succession of higher-lows since June 2021, indicating an uptrend:

USD/CAD Daily Chart

AUD/USD

AUD/USD Monthly Chart

The AUD/USD came near a late-2017 resistance at 0.81358 and has coincided with a long-term 50% retracement level.

On the daily chart, the price made a head & shoulders reversal, and tested the neckline at 0.75812 as resistance, indicating a new downtrend is forming:

AUD/USD Daily Chart

NZD/USD

NZD/USD Monthly Chart

The NZD/USD came near an early-2017 resistance level at 0.75580, and the price bounced against a 50-61.8% retracement zone.

On the weekly chart, 0.69430 (a late 2018 / early 2019 resistance) is now a support level. The outlook is bearish, and the price must break 0.69430 to confirm this:

NZD/USD Weekly Chart

On the daily chart, a head & shoulders reversal is visible:

NZD/USD Daily Chart

USD/JPY

USD/JPY Daily ChartThe USD/JPY has been in an uptrend since the beginning of 2021, reversing the downtrend of 2020. It has broken a key resistance at 109.850, further confirming the uptrend.

A word of caution about analyzing price charts: if a chart isn't clear to you, stay away. Either find a different chart or wait until it clears up, but the more guesswork involved, the more risk to your account.

Lastly, always mind your risk. Practicing risk management is essential to being a successful trader. Make sure to set good stop losses with good ratios when you trade.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.

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