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Forex Trading Tips - Week ahead of Mar 24, 2014

EURUSD

  • EUR/USD dropped sharply after FOMC on Wednesday
  • MACD is now below the signal line for the first time in six weeks
  • Bias for next week is bearish below the 1.3825 level
The EUR/USD moved higher early last week before reversing sharply down after the Fed gave a more hawkish view on Wednesday, breaking the bull run of the pair. For this week, a bearish bias in the pair is favored as long as rates remain below the key 1.3825 level, with near-term support expected at the Fibonacci retracements of the February/March rally. 

38.2 Retracement is at 1.37784
61.8 Retracement is at 1.36628


GBPUSD

  • GBP/USD broke below the 1 month range of 1.6600-1.6750 
  • MACD bearish, but Slow Stochastics in oversold territory
  • Potential for a bounce from 1.6470 support but bias for next week is still bearish
The GBP/USD finally broke out of its 1-month range, moving down to test support at 1.6470, the 61.8% Fibonacci retracement. At this point, the Slow Stochastics are in oversold territory so a bounce of support this week is a definite possibility. The MACD also shows continued bearish momentum, so the market may look to fade any early week bounces in the pair. After putting a floor under the unit for the past month, the 1.6600 level is likely to provide a ceiling if rates rally.
78.6 Retracement is at 1.63734

Commodities
The Brent oil has already reached the February low of 105.40, as we pointed out it early, breaking the 1-year uptrend. However, on the weekly chart of Brent , a much longer-term bullish trend line has managed to hold firm on a combination of short-side profit taking and possibly some buying interest, too. A break below this $105.40 mark would clearly be a bearish development. However some of the supply risks remain high as demand in China appears to have grown as per the recent reports.
WTI crude oil has meanwhile remained stable in recent days. The 4-week average of oil imports has fallen to the lowest in more than 17 years, suggesting it is indeed the rise in domestic oil production that has caused inventories to build.
The Relative Strength Index (RSI) has created a positive divergence with WTI prices i.e. the momentum indicator has made a higher low despite WTI forming a (mini) lower low recently. This suggests that the bearish momentum is fading and that we could see some more gains in early next week. The key levels to watch on the upside are $100.35 – the 200-day moving average – followed by $100.70/$101.00.

- By our Forex Order Management  research team. You can use the 'Forex Order Manager' along with any manual or  automated forex trading systems to maximize your benefits.