Hello Forex traders,
Our monthly analysis continues at where we left of yesterday. To check out the monthly perspective on the majors (EURUSD, GBPUSD, USDJPY and AUDUSD), make sure to check out this link for more information. Today our focus is on the major crosses, starting with the EURJPY.
The EURJPY uptrend was relentless until the previous month of January ’14. Last month posted a sizeable bearish monthly candle. Here are some interesting details:
a) Two -61.8% targets have been reached when price entered the 143-145 zone.
b) The close of the candle is very near the low, which is indicating that the bears were in control at the end of the month with no sign of a bullish bounce (wick)
c) The close of the candle is lower than the low of the previous candle / month (December ’13) which means that the low has been broken.
d) The high of the candle was lower than the high of December as well, which indicates lower highs and lower lows on these candles.
How far can this downside momentum last within the uptrend? When placing a Fibonacci retracement key on the last swing high, swing low (red Fib), we can see that the 38.2% has been broken but the 50% and 61.8% Fibs could turn into support areas. This will surely depend on whether or not the USDJPY will continue with its weekly/monthly uptrend or not.
The GBPJPY has posted a similar January 2014 monthly candle as the EURJPY, albeit slightly less bearish due to the fact that the low of December ’13 had not been broken. Still, the downside momentum in the first day of trading in February has seen a fall of some 400 pips already.
Here too the downside could be a retracement for more upside trend continuation or the start of a bigger retracement. The GBPYJPY however did not hit the -61.8% Fib so I am reluctant to place a new Fib (besides green) on the chart. An obvious support level, however, could be the previous broken top at 156.80 (thick green horizontal line).
GBPAUD + EURAUD
Then last but not least, how do the Euro and Pound match with the Aussie?
The GBPAUD actually still posted a bullish candle last month, although the wick on the top is significant (+/- 30%). Another important aspect is the fact that this push up (almost) took out the -61.8% Fib (green), which is a major long-term target.
The EURAUD has something similar, although there are 2 minor differences. The EA took the -27.2% target instead, and it posted a Doji monthly candle.
With the Euro and Pound hitting major levels, will there be Euro and Pound weakness and retracements? With Yen and Aussie weakness trends already in play, could it become the year of USD strength? What do you think? Let us know down below in the comment section!
Thank you for taking the time to read this article. Any shares of this article are as always greatly appreciated!
Wish you Good Trading!
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