Forex Weekly Watch: Sept. 22 – 26, 2014

EUR/JPY

EUR/JPY 1 Hour Forex Chart

EUR/JPY 1 Hour Forex Chart

We’re going to see a repeating theme here in this week’s forex watchlist thanks to a big pick up in volatility and momentum in the currency markets: Fibonacci retracements!

For EUR/JPY, it’s been an effortless ride higher for the bulls as the pair has rallied about 500 pips since it’s last swing bottom around 136.00 a couple of weeks ago.  We are seeing a small pullback from the move, and using the Fibonacci retracement tool from last week’s shallow pullback to the top around 141.20, we can see a strong argument for potential support around the mix of bottom WATR, moving averages and the major psychological handle of 139.00

  • WO: 139.96
  • Top WATR: 140.84
  • Bottom WATR: 139.08
  • PWH: 141.23
  • PWL: 138.46

GBP/JPY

GBP/JPY 1 Hour Forex Chart

GBP/JPY 1 Hour Forex Chart

With near identical behavior to  EUR/JPY, Guppy is also setting up for a potential retracement setup towards the upside. The moving averages are rising up to meet the bottom WATR level and Fibonacci retracement levels, and with the uncertainty of the Scottish referendum vote out of the way, more pound traders may lean towards the bullish side.

Stochastics are already indicating potentially oversold conditions on the one hour timeframe, so we may see another shallow retracement this week if indeed the bulls are still in control.

  • WO: 177.79
  • Top WATR: 179.18
  • Bottom WATR: 176.41
  • PWH: 180.71
  • PWL: 172.99

EUR/GBP

EUR/GBP 1 Hour Forex Chart

EUR/GBP 1 Hour Forex Chart

And the last of today’s trio of Fib setups is on EUR/GBP.  Again, much like EUR/JPY and GBP/JPY above, we’re looking at almost the perfect trend pullback setup on a combination of several technical arguments: Fibonacci retracement, moving averages as dynamic support/resistance, and the top of its weekly average true range all lining up.

Unless we get a big change to broad sentiment, I’m sure this area will most likely draw the attention of forex traders looking to short this pair.  And if you miss a pullback down the road, I’m sure that if we see a break of the previous week low (PWL), it will draw in more sell orders or trigger the ones already there.

  • WO: .7873
  • Top WATR: .7920
  • Bottom WATR: .7827
  • PWH: .8009
  • PWL: .7810

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