The forecasts for last week which were on the JPY pairs went right down; and that was the expected direction. However, it was not a quick move, but when the time came for the fall, it was massive. Some of the pairs from last week still make it into this week anyway. The focus for this week will be on selected USD and JPY pairs. These pairs seem to be making the same movement for this moment. The charts in focus for this week are EURUSD, NZDUSD, USDJPY and AUDJPY.
I have had the down channel located on this pair for quite some time now and it seems to be one of the legitimate patterns I have seen for a while now. It has been three months now and the channel hasn’t stopped dictating the pace of the EURUSD. Fed rate decision caused this pair to break up of the pattern quickly and it could not hold above down channel resistance to give credence to the bulls. The least expected happened when this pair fell right within the channel range the very next day. This is what is classified as a false break. I show how you can profit from a false break here.
Once price is still below down channel resistance, the strength remains with the bears. If it breaks above the resistance, the bulls take over again; but on a whole, I’m bearish this pair.
NZDUSD ended the week with price failing to break above a critical level. Unlike the EURUSD, this one was capped by resistance at the 0.6938 zone. This zone is critical because it acted as resistance in December 2018 and January 2019. Last week’s test of that level was the third touch. The candlestick that has formed at that zone is not a textbook one but it signifies strength for the bears. I am bearish this pair until it takes a break above the mentioned zone.
USDJPY has now made it 3 times in a row into my forecast. I was bearish this pair about a month ago and the move down materialized last week. The pattern cited on it is broken but still valid because it is that which will dictate the possible next direction of this pair. USDJPY I believe is set to suffer losses as long as it remains below the ascending channel support. Even as the move down is steep, I would be expecting retracements for re-entries. My bearish bias will be weakened if Friday’s candlestick is completely taken out by a bullish one(s).
For all we know, the AUDJPY is in a range; looking at the price action of the pair from early February till now. This pair sits right on support from how it ended last week. I may be jumping the gun once more but I will be expecting a break below the 77.59 area for shorting opportunities. Nonetheless, if price remains on the support level, I will be neutral this pair until further notice.
I wish you a profitable trading week!