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Volatility picked up big time for currencies last week but it was choppy price action, which I think will continue this week. With plenty of potential market movers on the forex calendar–but not elite top tier events–I think the volatility will continue but likely stay within last week’s range.

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

For me, that means reversal plays at the previous week high around 131.50, and in between the bottom WATR and the previous week low. I still have a downward bias on the euro, but with recent data looking up from Europe, I would consider small nibbler traders for short-term, counter trend plays.

  • 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

On the one-hour forex chart above of Guppy, it looks like the recent 3-week slide has ended.  On the higher time frames, the 176.00 – 177.00 area held strongly as previous support in January, so it looks like there could be a strong barrier for the bears in the short term.

We will get U.K. CPI this week as the big potential market mover for the British pound, and with the trend of slowing inflation, resistance around the PWH and top WATR looks to be the play of the week for me.  But if the pair do get down to the 176.50 area, I would consider a short-term buy for potential quick pips.

  • WO: 179.50
  • Top WATR: 181.29
  • Bottom WATR: 177.72
  • PWH: 180.94
  • PWL: 177.17


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

EUR/GBP made another leg higher in its longer-term retracement, but the .7250 – .7300 area is once again a pesky resistance area to break.  Given the longer-term trend, that area still looks like a valid resistance area for sellers to play, but with the moving averages turning higher, I wouldn’t be against a small position long just under the bottom WATR and 200MA around .7150

  • WO: .7239
  • Top WATR: .7308
  • Bottom WATR: .7171
  • PWH: .7292
  • PWL: .7092

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