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It looks like the first round of French elections caused quite a ruckus for the European currencies and the yen early on this week! Here are the setups I’m keeping my one good eye on.

EUR/JPY

EUR/JPY Daily Forex Chart
EUR/JPY Daily Forex Chart

Ack! EUR/JPY erased most of its losses after that double top breakdown last week to gap up over the weekend and test the long-term channel resistance once more. This could be a sign that bulls are eager to charge and could keep pushing price higher for the next few days, although the gap could still get filled sooner or later.

Stochastic is on the move up to indicate that buying pressure is still in play, possibly taking EUR/JPY significantly past the channel resistance onto a test of the top WATR and perhaps a rally past the resistance at the 124.00 area. However, if sellers regain the upper hand, the pair could slide back below the PWH and make a beeline for the PWL near the 115.00 handle.

  • WO: 120.57
  • Top WATR: 121.84
  • Bottom WATR: 119.31
  • PWH: 117.82
  • PWL: 114.84

GBP/JPY

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

I don’t know about you, but this breakout looks pretty legit to me! Guppy has surged past the descending triangle resistance visible on the 4-hour time frame, indicating that buyers are gaining control of price action. This chart pattern is approximately 1,200 pips tall so the resulting uptrend could be of the same size.

For now, price might still fill in the weekend gap as stochastic is heading south from the overbought zone to show that buyers might need to take a breather after that pop higher. If support around the broken triangle resistance or bottom WATR and PWL keep losses in check, the pair could find its way back to the week open price or until the top WATR in the next few days.

  • WO: 141.48
  • Top WATR: 143.09
  • Bottom WATR: 139.87
  • PWH: 140.34
  • PWL: 135.61

EUR/GBP

EUR/GBP 4-hour Forex Chart
EUR/GBP 4-hour Forex Chart

 

EUR/GBP did break below that symmetrical triangle support I was lookin’ at, but price made a quick turnaround over the weekend after the French elections took place. Applying the Fib tool on the latest swing high and low on the 4-hour chart reveals that the pair is currently testing the 38.2% retracement level.

If this area, which lines up with the week open price and PWH, holds as resistance, price could fill the weekend gap and resume its slide to the PWL or lower. Note that the triangle is around 750 pips in height so this resulting selloff could last by the same amount. Stochastic is still pointing up to show that the correction is in play so a higher pullback to the 50% Fib at top WATR or the 61.8% Fib at the .8600 handle could be possible.

  • WO: .8487
  • Top WATR: .8557
  • Bottom WATR: .8409
  • PWH: .8512
  • PWL: .8317

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