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Last week, the bearish bias picked up even more speed, likely on broad risk aversion sentiment sparked by speculation the Fed will hike interest rates in the U.S. this year.

For this week, volatility is likely to stay up, especially with the Bank of Japan’s monetary policy meeting ahead. And if that pushes EUR/JPY higher, I’ll be watching the area between top WATR and the major psychological level of 130.00 to see if sellers are ready to bet more on the downtrend.

EUR/JPY 1 Hour Forex Chart
EUR/JPY 1 Hour Forex Chart

After that event, I don’t see any more potential major catalysts scheduled from Japan or Europe, so it’s likely back to technicals and broad sentiment then.

  • WO: 127.10
  • Top WATR: 128.67
  • Bottom WATR: 125.54
  • PWH: 131.87
  • PWL: 126.91


GBP/JPY 1 Hour Forex Chart
GBP/JPY 1 Hour Forex Chart

The picture is not so different for Guppy than in EUR/JPY thanks to the broad risk aversion moves, and weak data from the U.K. last week.

This week, besides the aforementioned BOJ monetary policy meeting, we’ve got U.K. unemployment data and the Bank of England meeting minutes releases to keep Guppy active, and much like EUR/JPY, I’ll be looking for a pullback to look for a way to play the trend at a better price.

180.00 may be an area where we start seeing sellers nibble, but the top WATR to around 182.50 is where I think I’ll look to play a short opportunity safely.

  • WO: 179.09
  • Top WATR: 180.89
  • Bottom WATR: 177.30
  • PWH: 183.92
  • PWL: 178.25


EUR/GBP 1 Hour Forex Chart
EUR/GBP 1 Hour Forex Chart

EUR/GBP sellers finally let up last week, but is this an opportunity to short at a better price? After such a long downtrend without any significant pullbacks (maybe since January), some profit-taking or simply a breather may be in order.

The pair is already on its way up to the start of this week’s trade, and the area to watch for potential resistance is from the top WATR to the previous week high; if it breaks that area, the next resistance area is not until .7300 – .7350, and with some top tier global events ahead (mainly this week’s Federal Reserve decision) on the forex calendar, anything can happen.

  • WO: .7097
  • Top WATR: .7161
  • Bottom WATR: .7033
  • PWH: .7220
  • PWL: .7014

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