FX.co ★ Fractal analysis of the EUR/JPY and GBP/JPY pairs. Trading recommendations

Dear traders,

For the EUR/JPY, we do not observe any evident initial conditions for a downward motion development. Also, we continue following the local upward structure from July 30 development in H1 scale. There is good potential for development of a mid-term ascendant structure from July 22 for GBP/JPY pair. In general, both pairs have positively correlated between each other recently.

In this analytical review, we will analyze the development of the structure for today for such pairs as EUR/JPY and GBP/JPY. Having read it, you should realize more clearly possible prospects of the currencies development. In this method, for a simpler representation we use the standard notions of the technical analysis, such as support and resistance levels, though the method itself is based on the properties of the fractal function and has a deep meaning of the current and the future situation understanding. All the calculations are made from the initial conditions of the cycle development. The direction of the price movement from the current initial conditions are shown with a black arrow line. The alternative movement is shown with a red arrow line, in case of breaking through the key levels for cancellation of the uprising or downfalling cycle. As a rule, the red line also indicates the correctional movement and a short-term exit through the level. Do not use only the images; study the text in order to understand the progress of the event.

Forecast for August 3:

The important levels for EUR/JPY are 115.84, 115.54, 114.79, 114.39, 113.34, 113.06, 112.69, 112.08, 111.61 and 111.31. Here, a short-term upward motion is awaited in the range of 114.39 - 114.79. The breakout of the last reading should be accompanied by a strong movement to the level of 115.54. In the corridor of 115.54 – 115.84 is price consolidation. For a descendant tendency in h1 scale, there are no any initial conditions. A correctional movement is possible in the diapason of 113.34 – 113.06; the breach of the last reading will cause a deeper motion; here a target is 112.69. From this level a key pullback upwards is expected; the breakout of it will affect negatively the further development of the rising tendency. The level of 112.08 is a major resistance for a downward structure, the breach of which will allow reckon on a motion to the first potential target of 111.61. Price consolidation is in the corridor of 111.61 – 111.31.

Trading recommendations:
Buy: 114.39 Take profit: 114.75
Buy: 114.85 Take profit: 115.54
Sell: 113.06 Take profit: 112.69
Sell: 112.55 Take profit: 112.08

The major levels for GBP/JPY are 141.23, 139.81, 137.96, 137.38, 136.48, 136.08, 135.24, 134.95 and 134.09. Here we are following further the development of the local upward structure from July 30. A consolidated movement is expected in the range of 137.38 – 137.96, a breach of the last reading should be accompanied by an impulsive motion to the level of 139.81, which is conditioned by the development of the mid-term increasing structure from July 22. A potential value for the top is considered 141.23 level, after reaching of which a downward rollback is awaited. A correctional falling movement is possible to take place in the diapason of 136.48 – 136.08, the breach of the last reading will cause a deeper correction; here a potential target is 135.24. The level of 134.09 is a key resistance for the descendant tendency development, before it, the formation of initial conditions for a downward cycle is expected.

Trading recommendation:
Buy: 138.00 Take profit: 139.81
Buy: 139.90 Take profit: 141.20
Sell: 136.48 Take profit: 136.08
Sell: 136.00 Take profit: 135.24

Please, note that making this trading recommendations we take into account not all potential of the structure development, but only the major levels.