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After breaking out of that symmetrical triangle formation the other week, EUR/JPY established stronger upside momentum by forming an ascending channel pattern.

Price is currently testing the channel resistance and might be due for a correction since Stochastic is indicating overbought conditions.

EUR/JPY 1-hour Forex Chart

More buyers could be waiting at the channel support around the 115.50 minor psychological level and PWL, which also happens to be a former resistance area.

  • WO: 117.51
  • Top WATR: 118.67
  • Bottom WATR: 116.36
  • PWH: 117.49
  • PWL: 115.54


GBP/JPY 4-hour Forex Chart
GBP/JPY 4-hour Forex Chart

Not even the top of the descending channel visible on the 4-hour chart was enough to stop pound bulls from charging, as GBP/JPY broke past the resistance last week.

A combination of risk-taking and improved sentiment in the U.K. enabled the pair to advance towards the 137.00 handle. Stochastic seems ready to head south, though, so the price could retreat to the broken channel resistance near the bottom WATR and PWL before resuming its climb.

  • WO: 136.90
  • Top WATR: 139.05
  • Bottom WATR: 134.74
  • PWH: 137.59
  • PWL: 134.19


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

In the battle of European currencies, the sterling seems to be faring better than the shared currency, as the latter has been weighed down by political risks stemming from the French elections and Italian referendum.

EUR/GBP is trading below a descending trend line on its 1-hour time frame and is currently testing the area of interest at the .8600 major psychological mark and 38.2% Fib. If this keeps gains in check, the pair could drop back to the PWL or lower.

  • WO: .8580
  • Top WATR: .8684
  • Bottom WATR: .8476
  • PWH: .8707
  • PWL: .8527

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.