Fractal analysis for February 4

On the EUR/JPY currency pair, we increased potential for the upward trend, and the levels for correctional movement were changed. On the GBP/USD pair, the major key levels remained unchanged, however, the correction for the downward movement was made.

In this analytical review, I consider a structure development for the coming week for the EUR/USD and the GBP/JPY currency pairs. I use standard terms of technical analysis, such as support and resistance levels, however, the method is based on the fractal function properties and has a deep meaning for the understanding current and future situation. I make all estimations from the initial conditions of the cycle development. The black arrow is the price movement direction from the current initial conditions. The red arrow shows an alternative movement, in case of a breaking out of the key levels for cancel of an upward/downward circle. Also, as a rule, the red arrow points out the correctional movement and short-term upsurge/downsurge out of the level.

Forecast for February 4:

For the EUR/JPY currency pair, the major levels are 128.93, 128.38, 127.96, 127.14, 126.85, 125.69, 125.39, 124.98, 124.52 and 123.83. Here, we are following further the initial conditions for the upward cycle from January 29. We are looking for the short-term upward motion at the range of 126.85 – 127.14, the breaking out of the last reading will favour the impulsive motion, in this case, the target is 127.96, the price consolidation takes place at the range of 127.96 – 128.38. For now, the potential value for the ascendant tendency is level of 128.93, after reaching of which, a rollback is expected. The correctional downward movement is probable at the diapason of 125.69 – 125.39, where from the upward reversal is likely to start. The breaking out of the level of 125.39 will negatively influence on the initial conditions, in this context, the unstable movement to 124.98 level is expected, the breaking out of which will lead to the upward structure from January 29 cancellation, the first target is 124.52. The level of 123.83 is considered as the potential goal for the descendant movement.

On the GBP/JPY currency pair, the important levels are 147.51, 146.83, 146.50, 145.68, 145.29, 143.80 143.52, 143.10, 142.41, 142.03 and 140.91. Here, the main key levels remained particularly unchanged. I remind you that we are following the upward structure formation from February 1 in scale of H1. The short-term ascendant motion is possible at the range of 145.29 – 145.68, the breaking out of the last reading will have to be accompanied by the impulsive movement to the level of 146.50, the price consolidation will take place in the range of 146.50 – 146.83. The potential value for the upper level is 147.51, from which we are waiting for the downward pullback. The correctional downward movement is expected at the diapason of 143.80 – 143.52, where from the upward reversal is likely to take place. The breaking out of 143.52 level will unfavorably affect the upward structure from February 1. The cancel of the upward structure from February 1 development is possible after the breaching of 143.10, in this case we are waiting for the downward structure continuation and here, the first target is 142.41. Further, levels for the downward trend remained unchanged.

Analyst Aleksey Almazov