EUR/USD
Looking at the EUR/USD daily chart, you can see that we reached our projected 1.40 mark on better than expected employment numbers this past Friday. Once the pair broke above the 1.38 mark, we suggested that 1.40 would be the next target. However, there is a bit of resistance at the 1.40 level, and a pullback is certainly possible.
Any pullback should find support at the 1.38 mark, as it was heavy resistance before. Any bullish bar at that level would suggest that we are going to make another run at the 1.40 level, and that the bears are giving way. With the recent comments by the ECB suggesting that they are going to raise rates, this move is the most likely scenario. Any close below 1.38 suggests that we will try to find 1.36 and even lower. However, this is looking more and more unlikely.
It should also be noted that there is a potential bull flag on this chart. With a pole of 1,000 pips, it suggests that we may be heading to 1.47 before this move is all over with.
EUR/JPY
As we stated in the last video, 115 was going to be a huge spot for this pair. We saw it break above that level on Friday, only to be rejected. The daily candle is a perfect “shooting star” and shows that there was significant exhaustion at the level. However, the latest series of lows are getting higher, and this could signal that although we are not ready to hold above 115 yet – it’s only a matter of time. The 114 level could be tested as support, but should be able to hold this pair before another run at 115 happens.
USD/JPY
This pair has been in a large wedge for quite some time. Friday’s candle formed a very long wick at the top of the shooting star candle. The movement suggests that a move is coming soon, but isn’t ready to present itself yet. Because of the tightening of the wedge, the shooting star should be ignored as the stop losses needed to play this position short would be too large for the potential reward, (assuming the wedge holds) and the long position you might take will obviously find resistance form the start.
