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EUR/JPY made such a strong rally after breaking above its descending triangle pattern early last week. However, the price appears to be encountering strong resistance around the 118.00-118.50 area and might be due for a pullback.

EUR/JPY 1-hour Forex Chart
EUR/JPY 1-hour Forex Chart

The 50% Fib lines up with the bottom WATR this week and an area of interest that might hold as support. Stochastic is already indicating oversold conditions with a bit of bullish divergence, too.

  • WO: 111.19
  • Top WATR: 112.93
  • Bottom WATR: 109.45
  • PWH: 114.52
  • PWL: 110.82


GBP/JPY 1-hour Forex Chart
GBP/JPY 1-hour Forex Chart

Since the BOE refrained from cutting interest rates in their monetary policy statement, Guppy was able to stage a pretty decent climb last week. Price is now testing a rising trend line that’s forming on its 1-hour time frame so it might be due for a bounce while stochastic is making its way out of the oversold region.

A return in selling pressure once more pound traders realize that the BOE would most probably cut in August could still trigger a break of the trend line.

  • WO: 130.30
  • Top WATR: 133.82
  • Bottom WATR: 126.79
  • PWH: 136.78
  • PWL: 128.82


EUR/GBP 1-hour Forex Chart
EUR/GBP 1-hour Forex Chart

I’m seeing a head and and shoulders breakdown on EUR/GBP, signaling that further losses are in the cards, but it looks like the price is still pulling up to the broken support zone. If it holds as resistance, the pair could resume its drop to the bottom WATR and PWL. A break below that area could push the price lower by around 300 pips, which is roughly the same height as the chart formation.

  • WO: .8532
  • Top WATR: .8625
  • Bottom WATR: .8440
  • PWH: .8625
  • PWL: .8355

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