Forex Weekly Watch: Aug. 4 – 8, 2014


EUR/JPY 1 Hour Forex Chart

EUR/JPY 1 Hour Forex Chart

It looks like the pullback higher I was looking for came and then some!  The tight consolidation early in the week was quickly broken but moved back into consolidation mode between 137.50 – 138.00.  So where to now?

Well, we’ve got a stacked forex calendar for this week, most notably the ECB monetary policy decision this Thursday, August 7.  Barring any surprise events, we could see traders on the sidelines until that event where another consolidation breakout opportunity may develop.  Also, a retest of the moving averages and bottom WATR area may draw in fresh buyers to the pair.

  • WO: 137.68
  • Top WATR: 138.44
  • Bottom WATR: 136.93
  • PWH: 138.04
  • PWL: 136.63


GBP/JPY 1 Hour Forex Chart

GBP/JPY 1 Hour Forex Chart

Volatility also picked up for Guppy, but in a much bigger way as we saw over 100 pip moves in both directions.  To me, it looks like this pair is in rangebound, but I am leaning towards playing a bearish move given the lower highs since the beginning of July.  I’ve got my alerts set to the top WATRA area, which also happens to be near the moving averages to potentially draw in fresh sellers.  I wouldn’t mind checking out the bottom WATR level for a long play as well since that was a strong area of interest between April and June.

  • WO: 172.53
  • Top WATR: 173.54
  • Bottom WATR: 171.53
  • PWH: 174.22
  • PWL: 172.38


EUR/GBP 1 Hour Forex Chart

EUR/GBP 1 Hour Forex Chart

Despite the big upside breakout and broad Sterling weakness, I think the longer term downtrend in EUR/GBP is still intact.  But given the fact that we have monetary policy decisions for both the U.K. and Europe, I’ll be in wait-and-see mode for this pair before taking any action.  A retest of the .8000 to top WATR area will definitely get my attention, ONLY if I see bearish reversal candles form in that area.  But given the long drop we’ve seen this year, I wouldn’t be surprised if we see a deeper pullback…be safe with this pair forex traders!

  • WO: .7981
  • Top WATR: .8020
  • Bottom WATR: .7943
  • PWH: .7985
  • PWL: .7903

Risk Disclosure
Q2 2014 Trading Performance Review
Read about my trading framework
Follow me on
Follow me on Twitter
Like my Facebook page

  • ForExchange

    Hi Cyclopip,

    Something got my eyes in your analysis. Here are the short forecasts from you:
    EUR/JPY: bullish
    GBP/JPY: bearish
    EUR/GBP: bearish

    This is interesting and I think you get 1-2 and you lose also 1-2. Basically you are bullish and bearish once-once on all three currencies. This is an unlikely event, your forecast looks like more of a hedging strategy.

    Looking at my own trades, I hope your 2. and 3. forecast is right and the 1. is wrong 🙂

    Have a nice week

    • Cyclopip

      Hey ForExchange, I’m not normally bullish on euro because of fundamentals, but I think that move has been more of a risk-on bounce/euro-short profit taking, which means it may not have legs. Those are my thoughts on the current sentiment as painted by the market at the moment,
      but it can all go out the window this week with both the ECB and MPC
      meetings on the Thursday. Let’s see what happens…stay safe and good luck!