Forex Weekly Watch: Nov. 3 – 7, 2014

EUR/JPY

EUR/JPY 1 Hour Forex Chart

EUR/JPY 1 Hour Forex Chart

Thanks to a big surprise from the Bank of Japan last week, we only saw one way moves in the yen crosses and chart patterns blown away.  For this week, the question for EUR/JPY is, “will we see a pullback or a continuation move higher?”

My gut tells me that we’ll get some sort of pullback on profit taking ahead of a crazy busy economic calendar this week, especially the highly anticipated European Central Bank event this Thursday.  If a pullback does come, my area of interest is the major psychological area between 139.00 – 140.00 for a potential buy if the ECB decides to hold off on any new easing measures.

  • WO: 141.05
  • Top WATR: 142.08
  • Bottom WATR: 140.03
  • PWH: 140.80
  • PWL: 136.58

GBP/JPY

GBP/JPY 1 Hour Forex Chart

GBP/JPY 1 Hour Forex Chart

Much like EUR/JPY above, it was all about what was going on in Japan that had Guppy traders pushing the buy button furiously at the end of the week.  We could see some big volatility once again for guppy with an action packed forex calendar coming up, especially with the Bank of England monetary policy decision potentially being the main event for the pair.

Given renewed selling in the Japanese yen, buying Guppy seems like the only logical move this week, but like I mentioned above, a profit taking pull back is a strong possibility. If so, I’ll be looking for bullish reversal candles and the stochastic indicator in oversold territory starting around the bottom WATR levels, down to an area of previous consolidation back in September around the 177.50 handle.

  • WO: 180.15
  • Top WATR: 181.74
  • Bottom WATR: 178.56
  • PWH: 179.82
  • PWL: 173.39

EUR/GBP

EUR/GBP 1 Hour Forex Chart

EUR/GBP 1 Hour Forex Chart

EUR/GBP was much more calm last week than the other two major currency cross pairs that I regularly follow, with the British pound eventually winning out before the end of the week.  That means the longer-term down trend is still intact in my opinion, so I’ll be in sell mode for this week.  But it will be a “cautious” sell mindset given the monetary policy decisions from both the ECB and Bank of England on Thursday, which means I’ll be looking for a pullback higher to the top WATR area and falling moving averages around .7880 before the pair becomes interesting to me.

  • WO: .7811
  • Top WATR: .7877
  • Bottom WATR: .7783
  • PWH: .7943
  • PWL: .7822

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  • joe the signal breaker

    Hi there everyone,
    Im Joe from Sarawak Malaysia. I have a quick question. Actually im new in forex. Just about 2 month trading. Now i lost my trading. Im in negative mode. Its really bad for me but im taking it as a learning experience. So not talking more. Lets do business now. My question, what can i learn or expect from the value at economic calendar? What the actual value, previous value can effect the candlestick? How can i know it will go up or down base on the value?
    Thanks.

    • Cyclopip

      The biggest value that an economic calendar provides is that it is a reliable tool for knowing when volatility will pick up. Knowing when economic data points come out will give you a heads up on managing positions or getting ready for when a strong move may occur. Now, as a tool for knowing which way a market will go, we there is no consistent tool for that. Price movement is based on many factors, as seen and taken action upon by thousands of investors/traders of varying account sizes. Sure with experience and a little bit of homework, you can improve your chances of picking the right direction, but there is no 100% fool proof system to do so, which is why trade management skills should be the number one thing you develop and why traders are known as “risk managers” first. Hope that helps.