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EUR/JPY volatility increased once again and the market made a strong move to the downside last week thanks to a broad increase in risk aversion behavior. Price action ended the week in a bit of range-bound behavior, which I think may continue if there are no new catalysts for traders to act on.

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

Technically, the pair is hitting a previous support area from the beginning of August so there could be buying from here, but I’m looking more for a pullback higher to short the pair as I think that the China weakness catalyst may not be fully priced in just yet. This makes the intersection of the top WATR area and the falling moving averages an area of interest.

  • WO: 135.95
  • Top WATR: 137.34
  • Bottom WATR: 134.56
  • PWH: 138.96
  • PWL: 135.26


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

Guppy’s price action is a more defined down move over the last couple of weeks, with a volatile but range-bound behavior at the end. For mean, the next logical move to play for is a short one, with a potential setup much like EUR/JPY in the works.

The pair has bounced higher from nearly hitting 183.00 last week, and if there is a continued bounce higher, look for forex sellers to potentially hop in around the top WATR and 200 simple moving averages. This would also be the 50% Fibonacci retracement of the latest swing move lower.

  • WO: 187.54
  • Top WATR: 189.45
  • Bottom WATR: 185.63
  • PWH: 191.44
  • PWL: 183.39


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

EUR/GBP made a high of .7422 last week on the recent global risk aversion moves, but has since pulled back to create a potential long setup around the 200 simple moving average. I think if sellers do take it below the moving average early in the week, watch out for .7200 down to .7150 to potentially draw in buyers who wish the play the current global weakness theme driving the markets.

  • WO: .7252
  • Top WATR: .7332
  • Bottom WATR: .7173
  • PWH: .7422
  • PWL: .7247

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