Anybody else seeing the about to form inverse head and shoulders pattern on the EURJPY daily chart? Notice how the pair found support at 121.00, the low of the left shoulder. If my hunch is correct, and this is indeed an inverse head and shoulders pattern in the works, price could head up to 125.00 and test the neckline resistance. However, if a daily candle manages to bust through and close below support at 121.00, price would most likely fall towards this year’s lows.
Next up is the EURUSD. The bears have been dominating the market but it seems that support at 1.3450 has kept them at bay. Notice how price has already bounced from this level four times in the past. For today, keep a close eye on this support level because a break could be the signal the bears need in order for them take the pair to 1.3000. On the other hand, if price fails to close below 1.3450, we could see the pair rally back towards the top of the range at 1.3800.
Lastly, lets end with the USDJPY. The pair has been stuck in consolidation mode as of late, having formed a bullish pennant. What’s more is that price action has been respecting a longer term down trend line. Is a break out imminent? I think so! If we see a break out to the topside, look for price to gun for the former high near the 92.00 handle. On the other hand, if sellers come out ahead, look for them to bring price back down to lows near 88.20.