Forex Weekly Watch: Feb. 1-5, 2016

EUR/JPY

EUR/JPY 4-hour Forex Chart

EUR/JPY 4-hour Forex Chart

Think these resistance levels on EUR/JPY might allow the downtrend to resume? I’ve got short position open on this one on expectations of additional QE from the ECB in March, but the pair recently got a strong boost from the BOJ’s decision to implement negative deposit rates. If the top of the long-term descending channel previous week high, 61.8% Fib, top WATR, and 132.00 major psychological level hold as a ceiling, price could turn south and set its sights on the previous lows around 127.00 and the bottom of the channel. Stochastic is already indicating overbought conditions so bulls might allow bears to take over from here.

  • WO: 131.36
  • Top WATR: 132.57
  • Bottom WATR: 130.15
  • PWH: 132.28
  • PWL: 127.82

GBP/JPY

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

After breaking above a short-term descending trend line last week, GBP/JPY appears to have its sights set higher, as a new rising trend line is forming. A bounce off this support area, which is near the bottom WATR could pave the way for another test of the resistance at the 174.00 major psychological level and previous week high. On the other hand, a break below the trend line could set off another downtrend and a potential drop until the previous week low near the 167.00 handle.

  • WO: 172.76
  • Top WATR: 174.77
  • Bottom WATR: 170.75
  • PWH: 174.18
  • PWL: 166.99

EUR/GBP

EUR/GBP 1-hour Forex ChartEUR/GBP 1-hour Forex Chart

EUR/GBP 1-hour Forex Chart

Consolidation’s the name of the game for EUR/GBP! The pair seems to be stuck in a triangle pattern but might be ready to break out soon. Price could still test the bottom of the triangle since stochastic is pointing down, and a bounce could take it right back to the top. A breakout in either direction could yield around 250-300 pips in gains or losses, which is the same height as the forex chart formation. Better keep close tabs on the .7575 and .7625 levels, too.

  • WO: .7605
  • Top WATR: .7676
  • Bottom WATR: .7534
  • PWH: .7666
  • PWL: .7550

Risk Disclosure
Q4 2015 Trading Performance Review
Read about my trading framework
Follow me on MeetPips.com
Follow me on Twitter
Like my Facebook page