In today’s Forex Forecast, we offer the outlook for USD/JPY and EUR/USD, with Wilson Leung, Director at Trendsetter FX.
USD/JPY: Buy dips around 123.00
Leung remains bullish on USD/JPY, expecting a move higher towards 124.00 and even 124.60-124.70 area.
On the trade setup, he advices to buy the dips around 123.00, and maintaining a stop loss 50-60 points below it. But falling below 122.00 will see him reassess the bullish outlook.
EUR/USD: Downward momentum weakening
On the EUR/USD, Leung doesn’t favour a December parity call. He explains how the market is pretty short on the single currency, having finished the downward movement towards 1.07 in just 41 seconds after Friday’s blockbuster NFP number.
Leung believes that the EUR market might be base building. On the daily charts, he notes that the technical indicators are in oversold territory, while hourly charts show divergence, which suggests that the downward momentum is weakening.
He adds that the downside for the EUR/USD will be limited to 1.0660.
On the trade setup, he suggests selling the cross near the 1.0770-1.0790 area, but breaking above 1.08 will see short covering and an upside move towards 1.0834 and even 1.0880-90 area, before seeing weakness again.
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