Forex Weekly Watch: Dec. 7 – 11, 2015

EUR/JPY

EUR/JPY 1-Hour Forex Chart

EUR/JPY 1-Hour Forex Chart

Volatility went into overdrive for the euro last week thanks the ECB monetary policy decision and press conference.  For EUR/JPY, that meant an explosion higher from around 130.00 to 134.00 to completely change the chart.

On the one hour above, we can see the pair is now consolidating after the strong rally higher, making a simple breakout to the upside the setup to watch because of momentum. Don’t overlook the possibility for a downside move as well, but it may be limited to the bottom WATR because of the upside momentum. To the top , we have potential upside resistance at the major psychological area of 135.00 and top WATR.

  • WO: 133.97
  • Top WATR: 135.19
  • Bottom WATR: 132.76
  • PWH: 134.59
  • PWL: 129.76

GBP/JPY

GBP/JPY 1-Hour Forex Chart

GBP/JPY 1-Hour Forex Chart

Guppy made moves higher after another successful defense of the 184.00 support area, eventually making it up to the 186.00 area that was last week’s top WATR and previous area of interest.  So, it’s safe to assume forex traders are watching current levels closely for a breakout into a new direction.

I’m looking for a fresh move for confirmation before jumping in on the pair, but I do have a slight downward bias because this does look like a pullback in a recent downward swing move from the 188.00 area to 184.00, and because the stochastic is showing potentially oversold conditions.

  • WO: 186.19
  • Top WATR: 187.75
  • Bottom WATR: 184.64
  • PWH: 186.25
  • PWL: 183.99

EUR/GBP

EUR/GBP 1-Hour Forex Chart

EUR/GBP 1-Hour Forex Chart

EUR/GBP made an upside breakout once again, but the strength was there to stay last week.  This forms a similar scenario with EUR/JPY in that a consolidation breakout to the upside is the setup to watch this week.  For those convinced this is another opportunity to short on monetary policy (ECB easing while BOE holds) and interest rate divergence, the fact that a previous resistance area held once again makes for a great argument to go in short at market.  For me, I’m looking for a re-test of the PWH/top WATR to hop in short because I am that camp that likes to trade the economics, and that it will be the driving factor for this pair soon enough.

  • WO: .7196
  • Top WATR: .7265
  • Bottom WATR: .7128
  • PWH: .7251
  • PWL: .7007

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