Weekly Watch: Jan. 27 – 31, 2014

EUR/JPY

For the past two weeks, we’ve seen a pattern of lower highs and lower lows, with usually a big push lower occurring at the end of each week. Could we see a repeat of this behavior? We’ll never know until it happens, but I’m closely waiting for a test of the top WATR level and seeing if sellers will take control again. That level coincides with minor support between Jan. 20 – 23, so there is a good chance we’ll see some interest there.

EUR/JPY 1 hour forex chart

EUR/JPY 1 hour forex chart

  • WO: 140.04
  • Top WATR: 141.22
  • Bottom WATR: 138.86
  • PWH: 142.42
  • PWL: 139.75

GBP/JPY

It looks like guppy found support at 168.50, which held like champ a couple of weeks ago on Jan. 12. The next test is the top WATR area around the minor S&R level of 170.50 that acted as support between Jan. 14 – Jan. 19. A break higher there could draw in the bulls and take the pair to the next resistance level around 172.00 and the recent range high of 173.65.

GBP/JPY 1 hour forex chart

GBP/JPY 1 hour forex chart

  • WO: 168.80
  • Top WATR: 170.43
  • Bottom WATR: 167.18
  • PWH: 173.65
  • PWL: 167.18

EUR/GBP

Luckily for my EUR/GBP short trade, the pair dropped almost straight from the open, mainly on broad Sterling strength. It’s now testing the bottom of its average weekly range, so we’ll have to wait and see what traders do here. Since the trend lower is still intact, a break of the .8250 area has a good probability of taking the pair lower to retest the PWL, while support here may have a limited upside to the WO/PWH, depending on this week’s economic data.

EUR/GBP 1 hour forex chart

EUR/GBP 1 hour forex chart

  • WO: .8296
  • Top WATR: .8348
  • Bottom WATR: .8245
  • PWH: .8301
  • PWL: .8168

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