Hi traders,
For a start, I want to introduce myself as FX Operator after reading the all-time classic Reminiscences of a Stock Operator. With this nickname, I can constantly remind myself not to fall into the same situation as Jesse Livermore did.
As I found no appropriate section for me to post my weekly outlook for certain currency pairs, I decided to post it under the Forex Journals section. Today, I will share with you my weekly outlook on EURJPY pair which I have been trading for the past 6 months. I rely primarily on Fibonacci support and resistance levels, trend lines, MACD and exponential moving average. Here goes my weekly outlook:
EURJPY Week 14 Outlook
The end of last week saw EURJPY closed with a bullish candle on the weekly chart. The pair has broken above 61.8% Fibonacci resistance level of 157.68 (retracement from 151.70 to 161.38) to reach a high of 158.33 but failed to hold on the momentum and closed below the Fibonacci level on the last day of trading. This also means that the descending downtrend line on the daily chart remains intact (see Chart 1).
Chart 1: Descending Downtrend Line Remains Intact
Also, the last trading day for the week ended with a bearish candle on the daily chart, which caused the ascending uptrend line broken (see Chart 2).
Chart 2: Uptrend Line Broken
With the 4-hour chart on EURJPY posting a bearish divergence, we should expect to see the price action to go further downwards with resistance expected at 38.2% 155.79 area (retracement from the recent swing high of 158.33) and 155.39 (retracement from 151.70 to 161.38) with a break below could see the momentum shift towards the bears. For the recent Euro rally to hold, 154.23 is the critical level that the bulls must support. Looking at the economic calendar, there are heavy economic data coming out for the Yen so we shall see if the Yen continues to strengthen. Although intra-day bias slightly with the bears but will stay sideline to see where the market moves next keeping in mind that daily already in positive zone with weekly chart read bullish divergence.