Let’s start off with the EURJPY 4-hour chart. Last week, we saw a head and shoulders pattern forming on top of the pair’s recent uptrend. Before the week came to a close, the pair broke below the neckline of the head and shoulders formation, indicating that the pair could keep heading downwards. However, the selling pressure seems to be overdone, seeing how the stochastics are in the oversold area. The pair could pull back a bit, right until the 38.2% Fibonacci retracement level. This lines up with the broken neckline around 131.50. But if the pair decides to resume its uptrend and break above the 61.8% Fibonacci level, it could zoom all the way up and retest the previous week high of 134.48.
Next, let’s check how the falling trend line on the USDCAD 4-hour chart is holding up. The pair retested this trend line last week, as it climbed to the psychological 1.0400 mark before resuming its downtrend. Right now, with the stochastics moving higher, the pair seems ready to retest the trend line once again. The pair could climb up to the 50% Fibonacci retracement level and hit the descending trend line before dropping back down. Then again, the pair’s upward momentum could be strong enough to break the trend line this time. If that happens, the pair could climb back to the 1.0400 handle, which coincides with last week’s high.
Now, luck could be turning against the AUDJPY soon due to a presence of a head and shoulders in its 4-hour chart. The Aussie bulls are crossing their fingers right now because if the neckline gives way then the pair can find itself down to 81.00. However, if buying support still remains then the pair can range between the neckline and the resistance at around 86.00. It could continue its trek upwards if it manages to break above its yearly high.