Forex Weekly Watch: June 20-24, 2016

EUR/JPY

EUR/JPY 4-hour Forex Chart

EUR/JPY 4-hour Forex Chart

Euro bears seem exhausted from their recent dive, as signs of a pullback are materializing on the pair’s 4-hour chart. Applying the Fib tool on the latest swing high and low shows that the 61.8% level lines up with a descending trend line, an area of interest, and is also close to the previous week high – all of which might hold as a ceiling for any rallies. Still, the outcome of the EU referendum might spur either a strong breakout or yet another sharp drop.

  • WO: 118.47
  • Top WATR: 119.86
  • Bottom WATR: 117.08
  • PWH: 120.33
  • PWL: 115.50

GBP/JPY

GBP/JPY 4-hour Forex Chart

GBP/JPY 4-hour Forex Chart

Here’s another potential correction setup on Guppy. Price gapped up over the weekend and is currently testing the 38.2% Fib at the previous week high. A higher pullback could last until the 50% level, which coincides with the top WATR and a broken support zone. Stochastic is on the move up but is closing in on the overbought region, which suggests that pound bears could be ready to regain control, but keep in mind that the EU referendum could spur an extraordinary amount of volatility in the next few days.

  • WO: 151.31
  • Top WATR: 154.04
  • Bottom WATR: 148.58
  • PWH: 152.51
  • PWL: 145.40

EUR/GBP

EUR/GBP 4-hour Forex Chart

EUR/GBP 4-hour Forex Chart

Lastly, here’s a potential break-and-retest scenario on EUR/GBP. Recall that price recently broke past a descending trend line resistance on its 4-hour chart and tested the .8000 handle. From there, the pair retreated to the 50% Fib near the .7800 major psychological mark. Stochastic is already indicating oversold conditions so a climb could be in the cards, depending on how the Brexit vote turns out of course.

  • WO: .7830
  • Top WATR: .7909
  • Bottom WATR: .7751
  • PWH: .7994
  • PWL: .7841

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  • Tyler Gaye

    Just curious, what stochastic settings are you using?

    • Cyclopip

      I’m using slow stochastic (14, 3, 3). How about you?

      • Tyler Gaye

        Same now! Mine was set to 5, 3, 3 by default and I always knew something was off. Thanks for the feedback!

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