Forex Technical Outlook from the Savvy Trader

The Savvy trader is a nickname I gave to a long-time, highly respected Global-View member who has been sharing hi view on USDJPY after calling the top well in advance of the 161.93 high.

In this article he shares his thoughts on the market and looks ahead.

Key Week Ahead

I consider this coming week to be pretty important. It’s not just the end of the quarter but it’s the beginning of the new US fiscal year and it’s necessary for partisan negotiations to extend the debt ceiling which, as a reminder by the way, I consider to become a problem in 2032, which is a date I’ve had forever 20 years.

It’s obviously also nonfarm payrolls and this is probably going to set in stone whether we really do get another cut of 50 basis points and therefore a further 75 basis points between now and the end of the year. or will it just grudgingly be a total only of 50 bp

So to circle back to how this week is going to be important, I believe that it will set the tone for the rest of the year, regardless of who wins the election

Forex Technical Outlook from the Savvy Trader

USDJPY (monthly chart)

It hit the descending 50 dma on Thursday and we witnessed a massive rejection on Friday which encompassed the whole week’s range. Ouch.

We now have trapped longs who maybe are hoping for some reprieve on Monday being the last day of the month and quarter

Chances are that we have another liquidation in which case the targets are 141.10-13 then 137.38-.63 and possibly 136.85 and even maybe 132.59…. as we travel to my 128-132/134 levels

So let’s review EURJPY and GBPJPY to see if there are any additional clues

EURJPY (monthly chart)

I have a long term measured move target of 137.84 but let’s try and be a little bit more reasonable

156.11 – the whole area 154.5– 155.00 – possibly–> 153.92 – 152.34

BTW if one were to extrapolate the nearby levels for EURUSD that would give something like 1.1063-1.1225

EURUSD (monthly chart)

So, now let’s have a look at this pair

(i.e. without any influence)

I have 1.0995 – 1.1332 as extremes so that kind of fits

GBPJPY (monthly chart)

This is a pair that retail tends not to get involved with and understandably so BUT let’s have some fun

There is a clear 4 year cycle on this pair which over roughly the last 20 years has done broadly 250-116-195-125-208 to current 190

The year (2024) opened around 183 so that (183) would be a reasonable target but if broken then 175 becomes a level to contend with and a measured move down to 158 would not be unreasonable where 162ish would be a hesitation point

So now this begs what for Cable or GBPUSD

Again, extrapolating possibly 1.43 but more likely 1.36

So now let’s look at GBPUSD without this influence

GBPUSD (monthly chart)

We have prior tops around 1.4380 and 1.4250 so that matches previous comment topside

I have a measured move of 1.3630

so again this fits well

Perhaps I should look at EURGBP just the sake of it

EURGBP (monthly chart)

Having spent 6 years trapped in a range of lets call it more or less .8350 – .9200

we have since 2022 been trending lower with a broad outline of lower highs lower lows

I show .8230 very close to the 2022 low of .8200 and .7960

So how does that match up if we extrapolate .. well 1.4250 and 1.1332 = .7952 Q.E.D.

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Forex Technical Outlook from the Savvy Trader