Weekly Outlook: 2014, November 02 - 09

NZD/USD forecast for the week of November 3, 2014, Technical Analysis

The NZD/USD pair initially tried to rally during the course of the week, but as you can see found enough resistance at the 0.80 level to turn things back around and start selling off again. With that, we believe that a breakdown is imminent, and that we should continue to go much lower. With that we are selling the New Zealand dollar over and over, and believe that eventually this market should go as low as 0.75, and then possibly the 0.70 handle given enough time as the market is so bearish.

GBP/USD forecast for the week of November 3, 2014, Technical Analysis

The GBP/USD pair initially tried to rally during the course of the week, but then turned back around to slam into the 1.60 handle. With that being said though, it looks as if we have plenty of support in this area, so we believe that the market will continue to bounce around in this general vicinity. If we get a break above the 1.62 level, we feel that this market should continue to go much higher, perhaps heading as high as 1.72 given enough time. We have no interest in selling until we get below the 1.5850 handle.

EUR/USD forecast for the week of November 3, 2014, Technical Analysis

The EUR/USD pair initially tried to rally during the course of the week, but found enough trouble at the 1.28 level in order to turn things back around and fall very harshly. We tested the 1.25 level, but found it to be somewhat supportive towards the end of the session on Friday. Ultimately, if we break down below the lows of the week, we could go much lower at that point in time. We believe that the market should continue to go lower given enough time, and that the 1.25 level will eventually break down.

Ultimately, we believe that the market could very well head back down to the 1.2050 level, as it would then be a “round-trip” of the entire uptrend that we have obviously broken down below now. The fact that the 1.28 level, which of course was the 61.8% Fibonacci retracement level of the longer move, was broken down significantly, it appears that the market should make that round-trip previously mentioned.

Ultimately, we believe that anytime that this market will continue to be sold off every time it rallies, as the sellers are most certainly in control at this point time. And we think about it, it makes him presents as the European Central Bank almost certainly has to keep a very loose monetary policy in order to bring down the value of the Euro in order to try to stimulate the economy.

Given enough time, we believe that the real way to make profits over the longer term will be to continue to hang onto trades, perhaps adding to a position in order to increase its size every time we rally. The 1.20 level below should be rather supportive though, so we don’t know whether or not the market will actually go below there. At that point in time, it is possible that the trend will turned back to the upside, but assuredly at this point in time it appears of the market is ready to break down significantly. We have no interest in buying this market until we break above the 1.30 handle, something that does not look very likely.