by Johan Kriek (jkriek@fxinstructor.com)

The US dollar was sold off vs. the majors this week. The Japanese Yen benefited hugely. Will this trend continue next week? I don’t know. The only thing I do know is that the markets are pretty mixed as of now. At this point in time the JPY, EUR and GBP are bullish against the Bucky. The only one saying “nah” is the AUD

The above scenario sketches what we will be heading into next week. Have a look at the studies below so you can use this as a benchmark. Remember to make notes of the levels where the direction of highest probability will change as it is most important to change your perspective as soon as the bias changes in order to stay ahead and trade with as little risk as possible

Although this was a great week, remember to stay disciplined and you will be rewarded

Probability Studies:

Direction of  Highest Probability: BULLISH

60 minute trend support: 1.4855

Bearish Probability below: 1.4855

Significant support: 1.4855, 1.4560

Significant resistance:1.4969

Direction of  Highest Probability: BULLISH

60 minute trend support: 1.6305

Bearish Probability below: 1.6305

Significant support: 1.6305, 1.5700

Significant resistance:1.6446

Direction of  Highest Probability: BEARISH

60 minute trend resistance: Not yet identified

Bullish Probability above: 0.9230

Significant resistance: 0.9230

Significant support:0.8766

Direction of  Highest Probability: BULLISH

60 minute trend support: 90.40

Bearish Probability below: 90.40

Significant support: 90.40, 89.55

Significant resistance:95.30

Something interesting on the YEN:

I see we had an inverted Head and Shoulders pattern in the JPY. The neckline at 90.42 has since been violated to the upside as the pattern signified. Possibly, price could make a move downwards and bounce on 90.42 to confirm the breakout. Keep and eye on that support as it it significant. The direction of highest probability is bullish in any case so I wouldn’t enter any shorts. I’d rather look for nice long entries

___________________________________

This analysis has been based on the Probability Study Technique which is derived from the Dow Theory

Also note that a “trading condition” does not constitute a trading signal, but rather a context to execute your own trading system within.

For more about the Probability Study Technique, please visit forums.fxinstructor.com or register yourself a seat at

http://www.fxinstructor.com/eng/courses/probability-reserve.php to learn this technique

Enjoy and good luck!

Johan