It’s all about the short-term setups on EUR/JPY, GBP/JPY, and EUR/GBP this week, and I’ve got my eye on a couple of chart patterns and a pullback situation.
Just when it seemed like euro bulls were ready to charge after breaking past the short-term consolidation, price found resistance at the 133.50 minor psychological mark and dropped right back to support at 132.00.
Stochastic is indicating oversold conditions and looks ready to move higher, which means that the pair might follow suit. Its next upside target could be around the previous range resistance near 133.00, which happens to be at the top of the potential descending triangle pattern as well.
- WO: 132.25
- Top WATR: 133.27
- Bottom WATR: 131.23
- PWH: 133.51
- PWL: 131.86
Double bottom alert! Guppy is hovering around the long-term area of interest at 147.00 to 148.00, still deciding whether to make a bounce or a break.
Last week I thought that the floor was already giving in, but pound bulls rushed back in to defend the bottom, taking the pair up to the neckline around 149.00. A break past this resistance could lead to a 200-pip rally, which is around the same height as the chart formation.
On the other hand, if resistance continues to hold and bearish momentum picks up, a break below the bottoms could mean longer-term losses for Guppy.
- WO: 148.64
- Top WATR: 150.14
- Bottom WATR: 147.15
- PWH: 149.27
- PWL: 146.96
Here’s a quick update on the pullback situation I was looking at on EUR/GBP last week. I had to adjust the Fibs as price rallied to new highs around .9033 before making a more convincing correction.The pair is currently stalling at the 50% retracement level around the .8900 major psychological mark and might be due for a move back to the swing high. Note that this area lines up with a former resistance level that could hold as support.
A deeper pullback could last until the 61.8% Fib and .8850 minor psychological mark, which is still pretty close to the area of interest. A break below this level, however, could pave the way for a test of the swing low.
- WO: .8883
- Top WATR: .8954
- Bottom WATR .8812
- PWH: .9033
- PWL: .8876
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