Forex Weekly Watch: Jan. 25-29, 2016

EUR/JPY

EUR/JPY 1-hour Forex Chart

EUR/JPY 1-hour Forex Chart

Not even Doomsday Draghi’s hints of further ECB easing were enough to dull EUR/JPY’s shine last week, as the pair found support at the bottom of the descending channel and bounce right back to the top. Price is currently testing the channel resistance near the previous week’s highs and might be due for a move towards the top WATR if an upside break occurs. Stochastic is already in the overbought levels but hasn’t turned lower yet, which means that bulls might have enough fire left in ’em. A move below the week open near 128.00, however, could put the pair on track towards the channel support again.

  • WO: 128.07
  • Top WATR: 129.19
  • Bottom WATR: 126.96
  • PWH: 128.56
  • PWL: 126.18

GBP/JPY

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

Unfortunately for my Guppy short position, the pair made a strong upside break past the falling trend line and moved way past the 169.00 mark. This trend line breakout could be a sign that further gains are in the cards, possibly allowing price to break past the 170.00-171.00 major psychological levels and area of interest near the top WATR and previous week high. Stochastic is on middle ground but is pointing north so GBP/JPY might follow suit. A pullback to the broken trend line near bottom WATR might still take place before the climb resumes, though.

  • WO: 169.17
  • Top WATR: 171.05
  • Bottom WATR: 167.30
  • PWH: 170.36
  • PWL: 163.99

EUR/GBP

EUR/GBP 4-hour Forex Chart

EUR/GBP 4-hour Forex Chart

Looks like EUR/GBP is in the mood for a large correction! On its 4-hour forex time frame, price is still above the rising trend line connecting the latest lows, and the 61.8% Fib is right smack in line with the support area and bottom WATR. To top it off, a bullish divergence can be seen, with stochastic making slightly lower lows and price making higher lows. If you recall, that .7450-.7500 area lines up with the top of this pair’s long-term range in the past, which might be an attractive entry point for euro bulls.

  • WO: .7563
  • Top WATR: .7636
  • Bottom WATR: .7490
  • PWH: .7756
  • PWL: .7527

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