Forex Weekly Watch: Apr. 4-8, 2016

EUR/JPY

EUR/JPY 1-hour Forex Chart

EUR/JPY 1-hour Forex Chart

It looks like the uptrend is still intact for EUR/JPY but the pair is having trouble sustaining its bullish momentum, creating a rising wedge formation visible on its 1-hour time frame. Price just bounced off the top of the pattern and might be due for a test of support, which is somewhere above the PWL and bottom WATR for this week. Also, a bullish divergence can be seen as price made higher lows while stochastic drew lower lows.

  • WO: 127.23
  • Top WATR: 128.47
  • Bottom WATR: 126.00
  • PWH: 128.22
  • PWL: 126.33

GBP/JPY

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

Guppy bears were still busy painting the forex town red last week, triggering a sharp 300-pip drop on Friday. Price still seems to be moving inside that head and shoulders pattern I pointed out, although the formation looks a bit more sketchy this time. Still, a break below the WO and PWL levels could be enough to confirm a longer-term selloff, likely lasting by around 450 pips or the same height as the chart pattern. On the other hand, a return in bullish energy could lead to a rally to the resistance at top WATR or the PWH.

  • WO: 158.89
  • Top WATR: 161.13
  • Bottom WATR: 156.66
  • PWH: 162.58
  • PWL: 156.66

EUR/GBP

EUR/GBP 1-hour Forex Chart

EUR/GBP 1-hour Forex Chart

Triangle breakout alert! EUR/GBP surged past the ascending triangle resistance around .7900-.7925, signaling that further gains are in the cards. Pound weakness has been mostly in play during the previous week, spurred by Brexit fears and weak U.K. current account balance data. At the moment, price is consolidating in a bullish flag pattern just slightly above the .8000 handle so a continuation play might materialize.

However, euro bears could still put up a fight and lead to a potential pullback to the broken triangle resistance, especially since stochastic has been lingering in the overbought region for quite some time.

  • WO: .8006
  • Top WATR: .8083
  • Bottom WATR: .7930
  • PWH: .8020
  • PWL: .7831

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