FX.co ★ EUR/JPY: Weekly Technical Levels for January 23 - 27, 2012.

Weekly Technical Levels:

Tip (s):

R3 and S3 are good indication of the maximum range for extremely volatile days but can be exceeded occasionally.

Pivot lines work well in sideways markets as prices will most likely range between the R1 and S1 line.

In a strong trend, price will be low through a pivot point line and keep going.

If there is significant news to influence on the market, price may go straight through R1 or S1 and reach even R2 & R3 or S2 & S3.

Time Frame: H1.

Drag your Fibonacci retracement levels from the lower to the higher levels of the last week (It has 120 candles, as you know each candle is formed in 1 hour on H1 chart, then: (120 candles * 1 hour) / 24 hours = 5 days from the 16th of January to the 20th of January, 2012) in order to determine low and high price.

Average = (Higher - Lower) / 2
Average = 98.67

• Range was: 329 pips.
• The value of 50% Fibonacci retracement levels is: 98.67.
• 102.35 a strong resistance will be formed.
• 94.15 a strong support will be formed.
• Volatility is 3246.40.
• It should be noted that the price is still trapped between 100.70 and 97.10. As well as that the weekly pivot point equals 61.8% of Fibonacci retracement levels.
  

Observation (s):

• If the strength of the trend for the pair is an uptrend, then the strength of the currency is as follows: EUR is an uptrend and JPY is a downtrend.
• Most of traders use the Fibonacci retracement to determine accurate psychology level of support and resistance.
  
• Volatility Formulas: Variation = Average * (Higher - Lower).