Forex Weekly Watch: Oct. 26 – 30, 2015

EUR/JPY

EUR/JPY 1-Hour Forex Chart

EUR/JPY 1-Hour Forex Chart

Big drop in the euro against the majors thanks to a negative reaction to last week’s comments from the European Central Bank. This quickly turned the rising trendline I pointed out last week from a buy to a sell opportunity quickly as it easily broke on the major catalyst.

This week, it’s safe to assume the bearish sentiment is the way to go because of the major catalyst, and with a slight divergence between the stochastic and price, there could be a bounce ahead of us to get in the selling pressure at a better price.  I’ll be looking for a short opportunity if the area between the top WATR and the falling trendline is retested, between 135.00 – 135.50.  Of course, I gotta think about a situation where there is no bounce, in which case a break of the PWL  is one to watch and expect more sellers to jump in on.

  • WO: 133.54
  • Top WATR: 134.87
  • Bottom WATR: 132.22
  • PWH: 136.39
  • PWL: 133.38

GBP/JPY

GBP/JPY 1-Hour Forex Chart

GBP/JPY 1-Hour Forex Chart

The British pound was in a slow grind higher against the Japanese yen before the ECB event that brought in a round of heightened volatility to the forex markets; the event only enhanced the move higher as Sterling was likely the main beneficiary of euro weakness.

On the chart above, we can see that the moving average was the dynamic support that the pair needed to keep moving higher and I’ll look for that to continue, barring any surprise news events or broad sentiment changes. The area around the bottom WATR/PWL definitely looks like a buying opportunity as it lines up with a major psychological level, while a break of the PWH could draw in more buyers into what already seems like a pretty solid uptrend. If so, we may not see resistance again until the 188.00 handle, which was the Septembers high area.

  • WO: 185.88
  • Top WATR: 187.72
  • Bottom WATR: 184.04
  • PWH: 186.26
  • PWL: 183.85

EUR/GBP

EUR/GBP 1-Hour Forex Chart

EUR/GBP 1-Hour Forex Chart

Big week for EUR/GBP  as well as the pair lost nearly 200 pips on the week, solidifying its short-term bear market status. I see a little bit of bullish divergence on this pair as well, which means there is potential for a bounce, and if the market hits potential resistance between top WATR and the major psychological level of .7300, I’ll look to start dropping in sell orders. But since the forex calendar is lined up with top tier central bank events with potential global sentiment implications this week, I’ll have to sit on my hands and see if my kill zone is retested and holds as resistance.

  • WO: .7185
  • Top WATR: .7257
  • Bottom WATR: .7113
  • PWH: .7374
  • PWL: .7169

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