Forex Weekly Watch: July 6 – 10, 2015

EUR/JPY

EUR/JPY 1 Hour Forex Chart

EUR/JPY 1 Hour Forex Chart

For the second week in a row, we’ve got a weekend gap setup thanks to the Greeks voting against the conditions of the rescue packaged offered by creditors, likely leading to a Greek default on their debt. This took bullish sentiment away from both the euro and risk-on plays (e.g., short yen), causing EUR/JPY gap open lower to around 134.00.

The pair has already climbed up in the few hours of this fresh trading week, nearly closing the gap. Much like last week, I think it’s safe to say sellers will be eyeing the gap close to potentially jump in, especially since it lines up with the normal volatility range (top WATR) and the falling moving averages, making 136.00 – 137.00 the areas to watch out for potential reversals back to the downside.

  • WO: 133.97
  • Top WATR: 135.70
  • Bottom WATR: 132.25
  • PWH: 138.11
  • PWL: 133.78

GBP/JPY

GBP/JPY 1 Hour Forex Chart

GBP/JPY 1 Hour Forex Chart

We’re getting similar price action in Guppy compared to EUR/JPY, again on broad bullish Japanese yen sentiment as forex traders look for safety in these unprecedented times. The weekend gap has already nearly filled as well, which may not be necessary to happen as we saw the bears take over last week without a total gap fill. 191.00 is an area where we may see sellers nibbling, but 192.00 is also a strong candidate since it looks like a strong area of interest last week and at the beginning of June.

  • WO: 189.37
  • Top WATR: 191.13
  • Bottom WATR: 187.61
  • PWH: 193.49
  • PWL: 190.91

EUR/GBP

EUR/GBP 1 Hour Forex Chart

EUR/GBP 1 Hour Forex Chart

The gap in EUR/GBP is much smaller than last week, and relative to its currency-cross cousins, so it shouldn’t be too difficult to fill.  And while the pair still looks to be in a valid downtrend, the picture looks like the market is shifting into consolidation mode.

So, I think the downtrend will likely draw in sellers on a retest around the top WATR, I’d be very cautious because that area could quickly turn out to be the jump off point for breakout traders, or momentum traders who view the moving average crossover turn to the upside as a signal to start buying up. For sellers, it may be prudent to wait for a strong move below the week open (WO) to ride the potential trend lower.

  • WO: .7075
  • Top WATR: .7154
  • Bottom WATR: .6996
  • PWH: .7166
  • PWL: .6986

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