Decisive week for the Euro?

Recommendations:

• Medium: sell the EURUSD at 1.3550, SL 1.3610, targets 1.3500, 1.3450, 1.3400.

• High risk: sell the USDJPY at 97.90, SL 98.20, targets 97.00, 95.00, 93.50.

• Low risk: sell the USDJPY at 98.95, SL 99.40, targets 98.00, 95.00, 93.50.

Analysis:

The EURUSD has closed the week right on the trend line resistance. It is unclear whether a breakout occurred or not. If this is a breakout, then its mildness might be related to summer holidays. Anyhow, we expect the EURUSD to reach 1.35 in the coming days/weeks. Revisiting the lower side at 1.28x/1.27x seems very unlikely at this point and buying at the resistance seems irrational. This is why the only trade remaining is to short the EURUSD on further advances, at around 1.3550 if it is reached next week.

The Australian dollar made a large correction last week which allowed EURAUD to breath a bit. The move was mostly driven by “a buyer the rumor sell the news” regime related to the interest rate cut. However, we expect the AUD to resume its decline and the EURAUD to continue its growth toward 1.50.

USDJPY is now clearly in bearish territory and will most probably continue its decline at least towards 93. We would attempt a short entry in between the previous historic low around 97.70 and the 61.8% Fibonacci retrace of the last move down at around 98.00. Should the pair come up to retest its down trending resistance, we would recommend to short it (around 99.00).

EURUSD Weekly Chart

USDJPY 4H Chart