Forex Weekly Watch: Jan. 11 – 15, 2016

EUR/JPY

EUR/JPY 1-Hour Forex Chart

EUR/JPY 1-Hour Forex Chart

EUR/JPY finally took a break from its downtrend last week, and we’re seeing signs we’ll get a little more bounce in the near future.  The “signs” I’m referring to is that bullish divergence spotted on the one hour chart, and if we do get a bounce, we may not get any sellers until the area surrounding the top WATR, falling 200 moving average and the psychological level of 129.00.  If retested and holds, look for sellers to resume the downtrend and potentially take the pair to new lows.

  • WO: 128.07
  • Top WATR: 129.26
  • Bottom WATR: 126.88
  • PWH: 128.88
  • PWL: 126.79

GBP/JPY

GBP/JPY 1-Hour Forex Chart

GBP/JPY 1-Hour Forex Chart

Guppy bulls didn’t have the same relief as EUR/JPY bulls last week, with barely a hiccup to the upside before dropping once again and creating new lows.  With the major psychological level of 170.00 tested and broken, the question now is whether or not we’ll finally get support or is it time for another drop in the pair?  Of course, that’s probably up to the global risk aversion moves we’ve seen lately, which I think is likely to hang around for at least this week.  I think a pullback to top WATR could draw some sellers, but I wouldn’t be surprised if the pair continued to drop from here given the environment.

  • WO: 170.29
  • Top WATR: 172.00
  • Bottom WATR: 168.58
  • PWH:176.27
  • PWL: 170.50

EUR/GBP

EUR/GBP 1-Hour Forex Chart

EUR/GBP 1-Hour Forex Chart

EUR/GBP is making new highs to the upside thanks to the previously mentioned global risk aversion (as well as weak U.K. data), which makes the outlook on EUR/GBP similar to GBP/JPY above in that the trend is for more Sterling weakness.  This makes a pullback to the bottom WATR a potential draw for buyers, but according to the stochastic indicator, there is a chance this move is a bit overbought.  Last thing to keep in mind for this pair is that it is a busy week for each of their respective central banks, so technicals can go out the window if there is a major surprise from either the Bank of England meeting or the European Central Bank monetary policy meeting minutes.  Stay frosty!

  • WO: .7514
  • Top WATR: .7581
  • Bottom WATR: .7448
  • PWH: .7517
  • PWL: .7313

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