The Weekly Update: EURUSD and GBPJPY Setups

Greece and EURUSD

Our short trade in EURNZD is in a decent profit at the time of this wring, approximately +300 pips. The tension between Greece is likely to increase as we near the end of May. Last week we discussed the International Monetary Fund (IMF) confidential memorandum that showed Greece will be unable to pay its loans in June if no deal is sealed in May. Last week we have sent you an email that we have a long entry in EURUSD but wish to wait for the weekly close, which appears to have been a wise decision unless Euro-Dollar gaps higher.

From a fundamental angle, moderate gains in the Euro are supported. If a deal is struck in the last minute moderate gains will be noted across all EUR pairs and crosses in the Forex market. In a scenario where no deal is sealed, Europe is likely to enforce capital measures control to contain the crisis. This means limiting ATM withdrawals and bank transfers for example. The outcome of such measures are often significant gains in the currency, which in this case is the Euro.

Based on the above that means we must downsize our exposure to EURNZD. If we are incorrect and should EURUSD trade higher due to a weak US Dollar (USD) and not a strong Euro the Euro-Kiwi trade should hold. As we enjoy positive interest at the rollover there is very little reason for us to exit the trade unless the protective stop loss order is triggered. Aside Euro-Dollar we may choose to capitalize over an intraday entry in GBPJPY as we will soon discuss.

EURUSD Technical Analysis

Bearing the above in mind we are focusing on Euro-Dollar weekly chart.

EURUSD Weekly Chart

Please click on the chart to enlarge:

EURUSD Weekly Chart, 24/05/15

EURUSD Weekly Chart, 24/05/15

Reversed Head-And-Shoulders (H&S) is being painted on the weekly chart with the formation of the right-hand shoulder, supported by the 15 Daily Moving Average (DMA). Despite the 15DMA support EURUSD could still correct lower towards the latter support at 1.0960 before trading higher. The protective stop loss order must therefore place layered beneath the latter support. The neckline is noted at 1.1474. We are counting on the neckline to be breached by the market, which is why we are targeting 1.1870.

EURUSD Trade Alert Details

Entry: market price (1.1002)
Take profit: 1.1870
Protective stop: 1.0834
Risk Ratio (RR); 1 : 5 (approx.)
Estimated duration: 60 days

GBPJPY Technical Analysis

We have been keeping a close eye on GBPJPY in an effort to discover a technical entry for the much-anticipated correction in the FX cross. Our entry is derived from the daily chart, however, we are attempting to an hourly entry that will allow us to tighten the protective stop loss order.

GBPJPY Hourly Chart

Please click on the chart to enlarge:

GBPJPY 60 Minutes Chart, 24/05/15

GBPJPY 60 Minutes Chart, 24/05/15

We have a potential for top H&S on the hourly chart. GBPJPY could still rise towards 188.50 (resistance firmed by the 15DMA in orange) before reversing lower. However, we suspect weak stops are likely to be layered above 188.50, which is why we must layer the protective stop above the latter resistance, which is above 189.00 based on our analysis. We have used the daily chart to determine our target, which is 185.60. We require a gap higher or gains towards 188.50 in order to establish the short trade. In a scenario where there are no gaps at the opening of the markets it will be a difficult decision due to the risk ratio.

GBPJPY Trade Alert Details

Entry: Negated
Take profit: Negated
Protective stop: Negated
Risk Ratio (RR): Negated
Estimated duration: Negated

30/05/15 UPDATE: Despite EURUSD recent recovery the price triggered our protective stop loss order. The losses were absorbed by our prior trade in EURNZD.

As EURUSD trade is closed it can  now be accessed by all traders. Open trades are restricted to members only. We have been proving trade alerts in the spot Forex market since May 2014. Sign up for one of our plans and review our documented trades performance.
The Weekly Update: EURUSD and GBPJPY Setups

The Weekly Update: EURUSD and GBPJPY Setups
                                             The Weekly Update: EURUSD and GBPJPY Setups
The Weekly Update: EURUSD and GBPJPY Setups
                                         The Weekly Update: EURUSD and GBPJPY Setups
The Weekly Update: EURUSD and GBPJPY Setups


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