I’ve got my eye on a couple of trend plays and one potential reversal setup on EUR/JPY, GBP/JPY, and EUR/GBP this week. Check ’em out!
This one broke out of the short-term descending triangle I was lookin’ at last week and is resuming its longer-term climb. Price has actually been moving inside this ascending channel since May this year and looks ready to head for the top.
However, stochastic is already indicating overbought conditions and could be due to turn lower. The mid-channel area of interest could keep gains in check for the time being, unless buyers continue to charge. So far, it looks like the Japanese elections are weighing heavily on the yen, which might mean more upside for this pair.
- WO: 133.90
- Top WATR: 134.94
- Bottom WATR: 132.87
- PWH: 133.97
- PWL: 131.66
Finally some bullish momentum for Guppy! I entered a long position on what I thought was a double bottom neckline break, only to find that the pair was about to form a short-term rising channel.
I held my breath a couple of times when the pair dipped to the channel support, worrying that it might break down. Good thing the long-term area of interest around the 147.50 minor psychological mark held like a boss. Phew!
Price has now gapped past the short-term channel resistance, indicating that buyers are eager to push the pair much higher. I’ve still got my sights on the swing high as my target for my trade but I’m considering trailing my stop in a bit.
- WO: 150.06
- Top WATR: 151.52
- Bottom WATR: 148.60
- PWH: 149.83
- PWL: 147.79
Reversal alert! EUR/GBP is having trouble forming new highs and has failed in its second attempt to break past the .9025 area, creating a double top formation.Price has yet to test the neckline at the .8850 minor psychological mark and complete a break lower to indicate that selling pressure is in play. Still, it’s worth noting that the chart pattern is approximately 175 pips tall so the resulting selloff could be of the same height.
Also, stochastic is indicating oversold conditions and might be ready to pull up, which means that the pair could follow suit. In that case, EUR/GBP still has a shot at testing the tops again and perhaps gunning for a break higher.
- WO: .8923
- Top WATR: .8994
- Bottom WATR .8852
- PWH: .9023
- PWL: .8856
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