Welcome to another blog by AspireFX, today we will be covering what has taken place with the euro versus the yen since the last blog post.
Starting on the 4-hour time frame with the same zones drawn in as the previous post, I was anticipating a move into 126.000 which was achieved as we can see by looking at the downward pointing arrow. Looking at the upward pointing arrows, we see how the lower zone held as support leaving another two wicked rejections with price closing around the upper zone that was shown. After the second wicked rejection of the zone, price went on to create a higher high and the last rejection closed as a hammer leaving a huge wick to the downside. Looking at the fib drawn, we can see that the 78.6 retracement is still valid, and we could still see upside on this pair, however price has been consolidating around this area.
On the 1-hour chart above, we can see price has been struggling to break the resistance of 126.000 as well as the support of 125.300 so it’s clear that this pair is currently trading between a 70 pip range. Looking at the fib drawn on this time frame, we can see that the 61.8 lines up nicely with the previous support area and the current candle is attempting to engulf the previous one. At market open, price failed to make a higher high so we could see another move into the lower zone if the current zone fails to hold as support.
From a fundamental perspective, there will be GDP releases for both the yen and the euro tomorrow morning which will be very important to consider. The yen revised GDP for Q2 is forecast lower as there was a downward revision in capital expenditure meaning businesses and organizations spent less money acquiring/maintaining fixed assets. Household Spending in Japan for July will also be released tomorrow. Brexit talks will resume tomorrow as well, with the latest statement out of the UK saying that if a free trade deal is not reached by 15 October, both parties should move on as they have still not come to an agreement on key points such as fishing rights and state aid.
Remember to stick to your trading plan and always use the correct risk management. Hit the subscribe button below to receive blogs sent directly to your e-mail.