Fairly tame week for the EUR/USD, USD/JPY and EUR/JPY.
The EUR/USD is in a consolidation pattern after hit the target area. The high of the pattern is 1.4160 and the low 1.3700. Movement above the high indicates another move higher with a target of 1.4600. This aligns with the January swing high. Movement below 1.3700 signals further downward action with a target of 1.3260. This target also aligns with support coming in from the August swing high (former resistance now likely to act as support). When trading this pair, most traders will find it adventageous to wait for a trend to emerge.
The USD/JPY is also in a consolidation pattern. The low is 80.84 and the high of the channel is 81.96. So this pair has been quite sedate, moving just over 100 pips total in 9 days. The Average True Range (ATR) is putting in some of its lowest levels in years. An expansion in volatility is highly probable, and is likely to be marked by a breakout of this range. A breakout to the upside has an initial target of 81.96-82.16, and a breakout to the downside has a target of 79.84-79.64. A target from former price action remains in place at 80.00. Trend remains down overall, but is range bound short-term. Like the EUR/USD, this pair is not the ideal candidate for range trading.
The EUR/JPY had a little more action, but also is stuck in an area of low probability trades. Of note right now is that support has held. There was two levels still on the chart from last week. There were no closes below 112 and intra-day support held at 111.45. This is short-term bullish, but remains in a low probability zone - the pair had a false breakout higher, and how is showing signs of having a higher low. If the pair can push up through 114.80 it would be the first trigger for an upside move. A rise above 115.70, the recent swing high, would indicate the uptrend is indeed in place with further upside potential. Failure to support at 111.45 is likely to extend downward movement to 109.55.
Cory Mitchell, CMT
VantagePointTrading.com
