EUR/JPY price action was locked in a range last week, tighter than its usual weekly ATR range. On the one-hour chart above, we can see that the market is still respecting that 135.00 major psychological handle as a resistance area, while the 133.50 area held as support like the previous week.
This week, I’m looking for a retest of the 135.00 handle to short, but it’s possible we won’t see real sellers until that falling trendline is retested. It’s also possible that the 136.00 major psychological handle may be the real resistance area if retested as mean reversion traders may step in here.
On the downside, 133.50 is definitely the area to watch for buyers, and if it breaks, it could draw in momentum players to the short side.
- WO: 134.60
- Top WATR: 135.97
- Bottom WATR: 133.23
- PWH: 135.12
- PWL: 133.44
GBP/JPY was also rangebound in last week’s price action, demonstrating that 181.00 is the place to buy while 182.50 – 183.00 drew in sellers like a moth to a flame. The range was tighter than the normal weekly ATR, so it’s possible that a breakout is in the cards, but for me, I’m looking for short plays because of the broad British pound weakness we’ve been seen lately.
The top WATR level lines up with previous levels of interest in the past month, including both a support reversal reaction and a broken support-retest reversal back to the downside. I also drew a Fib for all of your trend pullback traders, and we can see the 50% – 61% levels lines up with that crucial 185.00 level.From the downside, I’m definitely gonna keep an eye on that major, major psychological level of 180.00 as it may be a tough one to break, especially if there are forex traders out there thinking the recent Sterling weakness is short-term oversold.
- WO: 182.20
- Top WATR: 184.26
- Bottom WATR: 180.15
- PWH: 183.33
- PWL: 180.67
EUR/GBP was also in its own little range despite being pretty volatile in its own right. .7435 was the strong topside resistance area while .7355 held off the sellers from taking the pair back into its longer-term downtrend.
I’m cautiously bullish on this pair because of the broad strength in the euro vs. broad Sterling weakness, but I think eventually the stronger U.K. economy relative to the eurozone will once again be reflected in this pair.
For now, I’m looking for a pullback down to the PWL – bottom WATR before considering taking a small nibble position on this pair, as well as a break of the PWH for momentum traders to hop in and potentially shoot for the .7500 major psychological handle.
- WO: .7386
- Top WATR: .7436
- Bottom WATR: .7314
- PWH: .7442
- PWL: .7337
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.