I’m hoping to catch a couple of retracements on EUR/JPY and GBP/JPY or this potential breakout on EUR/GBP. Check out the setups on my radar this week!
EUR/JPY just broke above a rising wedge pattern, signaling that euro bulls are likely to keep charging. However, they’re also encountering a roadblock around the 134.50 minor psychological mark, which means that a pullback may be needed to draw more bullish pressure in.
Applying the handy-dandy Fib tool on the swing high and low on the 4-hour chart shows that the 50% level lines up with a rising trend line connecting the latest highs and lows, as well as an area of interest around the 132.00 major psychological level. But if buyers are eager to get back in the game, they could simply push for a break past the current consolidation.
- WO: 133.49
- Top WATR: 134.59
- Bottom WATR: 132.40
- PWH: 134.41
- PWL: 132.40
Guppy also just recently made an upside break from a long-term chart pattern, indicating that buyers have taken the upper hand. Price is stalling at the 153.00 handle, which suggests that a correction may be in order.The former resistance around the 148.00 major psychological level could hold as support moving forward as this is near the 38.2% Fib. A larger pullback to the 50% level close to the 146.00 handle could also be possible, but the line in the sand for a correction is at the 61.8% Fib or 144.50 minor psychological mark.
Stochastic is pointing down to indicate the presence of bearish momentum, which supports the idea of a pullback. But if market catalysts revive bullish pressure, a break past the 153.00 mark could be enough to signal another leg higher.
- WO: 151.32
- Top WATR: 152.88
- Bottom WATR: 149.77
- PWH: 152.86
- PWL: 150.15
This pair previously staged a sharp selloff but is pausing from its dive with this short-term consolidation pattern. Price formed higher lows and lower highs, creating a symmetrical triangle on the 1-hour time frame.
A test of support seems to be underway as stochastic is on the move down. If it holds again, a bounce back to the resistance around .8850 could be seen, but a downside break could send EUR/GBP lower by at least 150 pips or the same height as the chart formation.
- WO: .8820
- Top WATR: .8892
- Bottom WATR .8749
- PWH: .8899
- PWL: .8779
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