Good Day peoples, today we will explore our favourite Forex pairs for the week ahead. We have a wide watchlist but we like to pin point the markets with the best patterns for our set ups.
GBPJPY has been on an aggressive downtrend for the last couple of months with minor pullbacks. This is ideal for trend trading as we always want to trade trending markets with a linear trend.
Price consolidated around 143.00 last week for a short period before breaking out further to 140.00. We expect price to pullback to 142.00 and continue with the bearish trend.
This week we must be aware of The Trade Balance release for Japan which shows the difference in value between imported and exported goods and services. If the reports are positve we could expect this pair to fall further.
The British Pound fell lower last week. The release of The British Balance of Trade was a lot weaker than expected which fuelled the bearish momentum.
The Daily chart shows GBPUSD has been creating Higher Lows and Lower Lows which is bread and butter for all the trend traders out there. We expect price to retrace but to respect the previous Lower Low at 1.30000 and rejoin with the downtrend.
The US inflation rate was forecasted to increase from 2.9% to 3% however it remained the same. This had a Bearish impact on the Euro Dollar.
The daily chart shows a head and shoulders pattern has formed over the last year which signifies a trend reversal.
Price was respecting 1.15000 as resistance however a breakout of this area has further strengthened the downtrend. We expect price to pullback and try and retest 1.15000 as the previous resistance will now act as support.
Remember guys keep your charts clean as less is always more.
Wishing you all a profitable trading week!