Yesterday’s stock market fall saw the Forex pairs break through key resistance and support levels, notes Wilson Leung, Director of Trendsetter FX, as he shares the forecast for USD/JPY and EUR/USD
USD/JPY: Sell the recovery
Leung describes yesterday’s price action on USD/JPY, with the pair having seen a 500 point decline. Looking at the technical charts, he sees the price action suggesting the formation of a double top pattern on the cross, with the measured downside target pointing at 114.98. He further believes that the China situation suggests a quick turnaround in the stock markets is unlikely to be seen, and hence he remains a seller on USD/JPY on any intraday recovery above 120.42, targeting 117.90 levels with a stop loss at 121.
He further explains that 121 remains a key level for the cross.
EUR/USD: Buy dips
Leung maintains a buy on dips approach on EUR/USD below the 115.00 level. He sees some upside potential for the cross ahead.
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