Let’s do this again! Shall we? I couldn’t make an update nor trade during the past week because I had a super busy one. We get back to business from now onwards since my schedule is about going back to the usual. With a week-long break, I updated myself with the charts and found out that the forex market has been choppy in most pairs. This is when the profit making and keeping becomes the hardest. However, this market is never short of opportunities with EURGBP picking my interest the most.
The charts in focus for this week are EURGBP, NZDJPY and EURJPY.
EURGBP has been on a steady rise since the latter part of May. This steady rise became super choppy at an important level of resistance and it is still trading within the zone. It ended the week with a bearish move which is not totally confirmed. The steady rise has birthed an ascending channel pattern and the current market price is slightly below the channel support.
However, I won’t be quick to sell this pair yet. This is because, the channel is not well defined and there has been a couple of false breakouts depending on how you plot the channel. Also, this breakout happened in the late hours of Friday.
0.8953 is a long-term support and if price manages break below that level, the selling opportunity would be confirmed.
Just like the EURGBP this pair has also been on a steady rise, but it is within a very short period unlike the above. For close to two weeks now, NZDJPY has been moving up and it has formed an ascending channel as well. It ended the week slightly below resistance. On the daily timeframe, there has been a rejection of resistance as indicated by Friday’s candlestick.
Textbook price action tells me to be a bear but for the 4-hour timeframe, I would be neutral on the NZDJPY until the support or the resistance of the channel is massacred. Also, the EURJPY setup below forces my hand into more observation of the two JPY pairs that make it into this week’s forecast.
“A rare occurrence; whilst NZDJPY is trending up, EURJPY is trending down. These pairs are positively correlated most of the time. A better trade for last week would have been a short on EURNZD.”
EURJPY was in a downtrend the whole of last week. This one gives out a descending channel pattern. The downtrend may continue in the channel or there would be a break of the short-term channel resistance. These are the two scenarios I would be looking out for on this pair.
NB: Observe EURJPY and NZDJPY closely within the course of the week; be on the lookout for correlation getting back to positive to increase the probability of making any profit.
I wish you a profitable trading week.