Forex Weekly Watch: July 14 – 18, 2014

EUR/JPY

EUR/JPY 1 Hour Forex Chart

EUR/JPY 1 Hour Forex Chart

Broad risk aversion and Portuguese banking fears created a spike lower in EUR/JPY, setting up for what could be a new leg lower.  Using the Fibonacci tool, we can see that the 138.00 to 138.30 area lines up with the falling moving averages to make it an area to watch for bear traders.  On the downside, the bottom WATR level lines up with the major psych level of 137.00, increasing the possibility buyers will be hanging around there.  And you can’t rule out the possibility of buyers at the PWL, which is also a minor psychological level.

  • WO: 137.89
  • Top WATR: 138.69
  • Bottom WATR: 137.10
  • PWH: 138.84
  • PWL: 137.50

GBP/JPY

GBP/JPY 1 Hour Forex Chart

GBP/JPY 1 Hour Forex Chart

It was a much steeper pullback than I anticipated for Guppy, which means a better opportunity for the bulls. But it will be a week full of major tier data from both the U.K. and Japan, so be very cautious of playing tech only setups until the data clears.  For me, I’m watching the 172.50 – 173.00 area for stability and buying support to possibly play a long trade.

  • WO: 173.59
  • Top WATR: 174.70
  • Bottom WATR: 172.49
  • PWH: 175.26
  • PWL: 172.96

EUR/GBP

EUR/GBP 1 Hour Forex Chart

EUR/GBP 1 Hour Forex Chart

It was a choppy week for EUR/GBP last week, but for me, I think the downtrend is still intact.  The Fibonacci retracement levels and top WATR area looks like an area to watch to possibly play the downtrend at a better price, but as I mentioned earlier, there’s big data this week from the U.K. to be aware of.

If we see a big outlier in this week’s data, then it makes sense to view last week’s price action as a consolidation setting up for a breakout (probably above/below previous week highs/lows).  But if the data comes in near expectations or previous reads, I think forex traders will be reading ranging signals more, like WATR levels, Bollinger Bands and stochastic levels.

  • WO: .7943
  • Top WATR: .7983
  • Bottom WATR: .7904
  • PWH: .7969
  • PWL: .7914

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