Forex Weekly Watch: Feb. 2 – 6, 2015

EUR/JPY

EUR/JPY 1 Hour Forex Chart

EUR/JPY 1 Hour Forex Chart

In last week’s “Weekly Watch,” I said that “I’ll probably try to hop in on a pullback; with such a big move last week, it wouldn’t be surprising to see profit taking.” That’s pretty much what we got as the pair shot higher from around 131.00 at the beginning of the week to the potential resistance area around 134.00, which was also noted in last week’s post and where I did take a short EUR/JPY position.

Now seeing that the pair went into consolidation mode between 132.50 – 134.00 after the run-up, it might be time to look at consolidation breakout setups for this week. For those who are still bearish, that 134.00 area does present many technical resistance arguments (e.g., moving averages, Fibonacci, and my weekly levels), so if it does break momentum traders may jump in. If not, it’s likely well see sellers push the pair lower once again.

  • WO: 132.46
  • Top WATR: 134.02
  • Bottom WATR: 130.90
  • PWH: 134.36
  • PWL: 130.16

GBP/JPY

GBP/JPY 1 Hour Forex Chart

GBP/JPY 1 Hour Forex Chart

Last week, Guppy was volatile but stayed within the previous week’s range (175.80 – 180.00). Could we see a break this week? Quite possibly… this week’s forex calendar is packed with U.K. data and events, most notably the Bank of England monetary policy statement on Thursday. So, volatility could continue for the pair within the range, and if we do see a game changing event from the BOE, watch last week’s high and low because traders will be ready to fade’em or break’em depending on the news.  I know I’ll be keeping a close eye with my GBP/JPY long trade still working.

  • WO: 176.58
  • Top WATR: 178.33
  • Bottom WATR: 174.83
  • PWH: 179.42
  • PWL: 175.77

EUR/GBP

EUR/GBP 1 Hour Forex Chart

EUR/GBP 1 Hour Forex Chart

I mentioned last week that the .7500 – .7600 area was the area to watch for resistance, and it held beautifully as resistance up until Friday. The pair is still in a short-term technical downtrend, and like its cousin above, there are various arguments for .7500 – .7600 to continue to hold as resistance: Fibs, moving averages, weekly lines, and major psychological level.

With the data heavy calendar that I mentioned earlier in play this week, I would be a little cautious with my positioning until the BOE event, but overall, there’s a good probability we’ll continue to see resistance and rangebound action if there are no surprises.

  • WO: .7496
  • Top WATR: .7557
  • Bottom WATR: .7435
  • PWH: .7536
  • PWL: .7405

Risk Disclosure
Q4 2014 Trading Performance Review
Read about my trading framework
Follow me on MeetPips.com
Follow me on Twitter
Like my Facebook page