Yen & Aud Weakness in Forex

Hello Forex traders,

A brand new Forex week is ahead of us… Two full weeks of Forex trading are remaining in January. Our suggestion is to start the prep work with the following video:

1)      Weekly Forex recap video 

The weekly Forex recap video analyzes all of the majors such as the EURUSD, GBPUSD, USDSJPY, AUDUSD. Also the following articles and videos are recommend prior to this week’s trading:

2)      The Warren Buffett Approach to Currencies 

3)      Motivation, Situation & Improvement in Forex 

4)      Beginner’s Webinar: Part 1 

5)      Forex Trading Room Live Trades: 15+16 Jan 2014 

EURJPY

20- 1- 2014 ej

Here is a quick glance of recent history:

1)      The recent uptrend, which lasted from September 2013 up and to December 2013, accelerated all the way up to 146 and even surpassed the 2 weekly Fibonacci targets (green and blue) which were at 143 and 144.50.

2)      The subsequent retracement in this month of January (2014) saw the EURJPY drop to the 38.2% Fibonacci retracement level (red Fib).

There is no doubt that the Yen weakness is in a major weekly trend. Also the EURJPY weekly chart is clearly showing higher highs and higher lows, with a recent (last year Sept-Dec) acceleration and impulse to the upside. Since the beginning of 2013 there is also a neat uptrend channel (blue) in play which has a sustainable angle to it as well.

UPSIDE CONTINUATION

One could almost say: the only question remaining is when and where to expect upside? There are a couple of candidates in the running:

a)      The 38.2% Fibonacci (red Fib) would be a shallow bounce but certainly possible. Price is also half way the uptrend channel (blue).

b)      The broken resistance (red) level of approximately 138-139 now has become a support level (green) and likely bouncing area. There is also a 50% Fib (red) close by.

c)       All other Fib levels (red) would also be a potential support. Also the broken resistance trend line (purple) and the broken smaller top (light green) are support candidates.

20- 1- 2014 ej 2

FIBONACCI TARGETS

Once a bounce and uptrend were indeed to continue, then there are areas with Fibonacci confluence:

1)      The -78.6%, -100%, and the -27.2% Fibonacci confluence at +/-149

2)      The -100% and the -61.8% Fibonacci confluence at +/-155

3)      The -127.2%, -127.2%, and -200% Fibonacci confluence at 162-164

4)      The monthly resistance (red) at  169-170

GBPAUD

20- 1- 2014 ga

The Aussie weakness has been similar to the Yen in many regards. The GBPAUD for instance has moved up a whopping 4,500 pips. Can the uptrend continue?

In my opinion: YES.

First of all, trends should never be estimated. They can continue longer than Forex retail traders can stay solvent. Read more about trends in general here and trends versus S&R here.

Second of all, the -27.2% Fibonacci target to halt, but last week’s very powerful bullish candle doesn’t hint at any signs of bullish weakness. With the -27.2% Fib out of the way, the -61.8% target is the next major Fibonacci level (green) at -61.8% at 1.93.

What do you think of the Yen and Aud? Are you trying to capitalize on the Yen and Aud weakness as well? Let us know down below in the comment section! Thanks!

Thanks for reading and sharing this article. Wish you all great trading this week!

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Chris is the head of the mentoring program and trading room at Winner's Edge Trading. He has a passion for technical analysis and helping Forex traders achieve their goals in trading. Chris has been trading for almost 10 years and is most fond of the Double Trend Trap (as a strategy), moving averages (as an indicator) and Fibonacci (as a tool).
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  • Chris Svorcik

    Your welcome! Thanks for the comment!

  • http://www.gurutrade.com/ GuruTrade

    Thanks a lot! Glad that the Japanese currency slightly strengthened versus the dollar.