31th July Weekly Analysis: Flag at EUR\USD, Channels

In the EUR\USD, the 15-minutes chart we can see a very precise flag chart pattern which is a continuation pattern. It is a strong sign that the EUR\USD will continue upwards, and might even open the trading with a breakout gap outside the Flag. It also performed retracement to the 23.6 Fibonacci level which gives extra confirmation to the possibility that price will continue upwards. Flags are continuation patterns that appear after strong trends, and while seeming to go to the opposite direction they are in fact just a temporary pause that lead to price continuing the trend in its original direction.

In the EUR\JPY we can see strong resistance level at 111.45 and a descending trend line which have been confirmed for 5 times, so it is a strong trend line. In case price touches the trend line and bounces we will enter a short trade with tight stop loss just above the swing high. This short seems logical, as price has just broke a channel in the hourly chart and is facing down with high probability.

In the GBP\JPY Forex pair we can see that price has broke the support level at 127.000 and performed a very accurate pullback that resulted in a 80 pips move. Price is now ranging between a channel pattern - so we will enter short trades on the upper trend line. This trades are also confirmed by the EUR\JPY which also seems to be going down at the moment.

Good luck to you all.