Weekly Watch: January 30 to February 3, 2012

Did anyone catch that Djokovic-Nadal Australian Open finals last night? That thing was EPIC, man! Two great players going back and forth for almost six hours!

It sort of reminds me of EUR/GBP price action last week. If you take a look at this pair’s recent price action, you’ll see that it kept bouncing up and down and paid special attention to the previous week high (PWH) that we marked down in last week’s Weekly Watch. Let’s see if the other cross currency pairs do the same this week!

EUR/JPY

EUR/JPY Hourly Chart

After rallying strongly for the past couple of weeks, the pair started to show signs of stalling. I think the 100.00 major psychological level (MaPs) may present a trading opportunity if price comes to test it. Take note, the markets reacted the last couple of times price was at this level, and this time around, the bottom WATR is just a few pips above it. I’ll also be keeping an eye on the 102.00 MaPs as a mid-term potential resistance level.

  • WO: 101.44
  • Top WATR: 102.74
  • Bottom WATR: 100.14
  • PWH: 102.22
  • PWL: 98.92

GBP/JPY

GBP/JPY Hourly Chart

I think there are two main areas to watch on GBP/JPY this week. On the upside, we have the area near the 122.00 MaPs, PWH, and top WATR. On the downside, we have the bottom WATR and PWL, a noted former area of interest. With so many inflection points lining up in these areas, there’s a good chance we’ll see a market reaction if price hits these levels.

  • WO: 120.66
  • Top WATR: 121.84
  • Bottom WATR: 119.48
  • PWH: 122.06
  • PWL: 119.48

EUR/GBP

EUR/GBP Hourly Chart

Rounding up this week’s charts, we have EUR/GBP. This pair had been putting pressure on the .8400 MaPs in recent days, so it’s best to monitor this level. With how price is flirting with it, I think we could soon see an opportunity to play a bounce or a break.

  • WO: .8406
  • Top WATR: .8472
  • Bottom WATR: .8340
  • PWH: .8407
  • PWL: .8277

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