Daily Forex Analysis: Continuation at EUR\USD, Reversals at JPY

The EUR\USD shows us some interesting patterns on Daily charts. First of all, we can see a standard Symmetric Triangle on daily chart, we usually signals the continuation of previous trend - in this case bullish move. We have also seen an exact pullback to the Resistance trendline and a steep bounce of price. An Asymmetric Megaphone at the 1-hour chart of last Friday also contributed to the movement up. The Triangle is generally an unreliable pattern, but it can certainly give clues of a Bullish bias of this pair. Beware of Resistance at 1.4 and 1.5. These round numbers are powerful Resistance levels that can serve as a serious block to the advance of price. It is expected that price opens slowly, creates a retracement to a Fibonacci level and continues up.
* Stay aware of Retracements to Fibonacci levels.

The Japanese pairs seems to prepare a reversal for the couple of next weeks. This can be seen by
matching reversal patterns on the EUR\JPY and USD\JPY. In the EUR\JPY we can identify a Broadening Wedge that is a reversal pattern. This pattern is traded in an untraditional way: By waiting for price to hit a Resistance level. We do not trade breakouts or pullbacks of this pattern. To read more about how to trade this pattern, click here.
* If price reaches the 136 Resistance and creates a reversal pattern - enter short with target: Breakout down of the Wedge.

The USD\JPY also gives us reversal hints, in the form of standard Wedge. This also is a reversal pattern that usually leads to breakout downwards and a downtrend. Price also closed the trading week with a steep fall, suggesting that the breakout is close. We would expect a Gap down in case of a breakout, at the opening of trading in Monday.