Forex Weekly Watch: May 2-6, 2016

EUR/JPY

EUR/JPY 4-hour Forex Chart

EUR/JPY 4-hour Forex Chart

So much for that double bottom formation last week! EUR/JPY is making another attempt at breaking the 122.00 major psychological mark, which happens to line up with the previous week low and this week’s open price. A break below this key support zone could lead to a drop to the bottom WATR or lower while a bounce could push EUR/JPY back up to the range resistance near the 126.50 minor psychological level and PWH. Can yen bulls keep up with their post-BOJ rallies?

  • WO: 121.79
  • Top WATR: 123.19
  • Bottom WATR: 120.39
  • PWH: 126.46
  • PWL: 121.68

GBP/JPY

GBP/JPY 4-hour Forex Chart

GBP/JPY 4-hour Forex Chart

Remember that GBP/JPY descending trend line breakout? Well, it looks like the pair is showing the classic break-and-retest setup right here! Price is currently retesting the broken trend line, which coincides with the WO and PWL, possibly allowing it to hold as support. Stochastic is indicating oversold conditions so sellers might be feeling tired. A bounce could complete the formation of an inverse head and shoulders pattern, signaling that the reversal could resume, while a break could lead to a drop towards the bottom WATR.

  • WO: 155.26
  • Top WATR: 157.83
  • Bottom WATR: 152.69
  • PWH: 162.83
  • PWL: 155.32

EUR/GBP

EUR/GBP 4-hour Forex Chart

EUR/GBP 4-hour Forex Chart

Here’s another textbook retracement play on EUR/GBP. The pair is in the middle of a correction to the broken trend line, which lines up with the 61.8% Fib level. A shallow pullback could last until any of the Fib levels, as these also line up with other potential inflection points such as the .7900 handle for the 38.2% Fib or the top WATR for the 50% Fib. With the U.K. PMI readings lined up for this week and a bunch of medium-tier euro zone data due, this pair could see a lot more volatility.

  • WO: .7844
  • Top WATR: .7920
  • Bottom WATR: .7768
  • PWH: .7843
  • PWL: .7735

Q1 2016 Trading Performance Review
Risk disclosure
Read about my trading framework
Follow me on MeetPips.com
Follow me on Twitter
Like my Facebook page