Forex Weekly Watch: Nov. 23 – 27, 2015

EUR/JPY

EUR/JPY 1-Hour Forex Chart

EUR/JPY 1-Hour Forex Chart

EUR/JPY recovered from last week’s gap lower, but as I mentioned in my Weekly Watch, sellers were waiting at the combination of falling trendline, moving averages and top WATR to jump back in and push the pair lower to close the week near the lows.

I’m gonna sound like a broken record, but I pretty much have the same analysis for this week in that a pullback up to the combo area of falling trendline, moving averages and top WATR will likely draw in sellers, and a break lower of the PWL is likely to draw in momentum sellers to play the current trend lower in EUR/JPY. But the major psychological handle of 130.00 is quickly approaching, so the downside break doesn’t propose a great R:R if that area holds strong if retested.

  • WO: 131.28
  • Top WATR: 132.50
  • Bottom WATR: 130.06
  • PWH: 133.21
  • PWL: 131.49

GBP/JPY

GBP/JPY 1-Hour Forex Chart

GBP/JPY 1-Hour Forex Chart

The chart setup on GBP/JPY pretty much remains the same as well, but instead of testing the top of the channel like last week, this week we’re seeing the pair test the bottom of a channel that goes all the way back to the beginning of October.

And with the stochastic indicator showing potentially oversold levels, the conditions are good for a high probability that the down move may end here (as long as there are no big surprises from this week’s forex calendar). The area between the top WATR and previous high is likely to draw in sellers, while a break lower probably may not gain steam until the PWL has been broken as it has been a strong support area in the past.

  • WO: 186.20
  • Top WATR: 187.93
  • Bottom WATR: 184.48
  • PWH: 187.51
  • PWL: 185.39

EUR/GBP

EUR/GBP 1-Hour Forex Chart

EUR/GBP 1-Hour Forex Chart

After breaking down lower, EUR/GBP price action nearly grinded to a halt last week, trading between .6983 – .7020 to create a consolidation picture. This puts me into consolidation/breakout mode this week, with an obvious bias to the down side since the pair has yet to break the longer-term downtrend. Of course, if there is a bounce higher, I think that previous-broken support area around .7050 is one to watch for trend traders to jump back in the downtrend.  And if EUR/GBP breaks to PWL to make new lows, momentum traders could step in and create a move that just may make it down to the next major psychological area of .6900.

  • WO: .7008
  • Top WATR: .7075
  • Bottom WATR: .6942
  • PWH: .7079
  • PWL: .6983

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