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Can European currencies extend their rallies for yet another week? I’m zooming in to the 1-hour charts of EUR/JPY, GBP/JPY, and EUR/GBP to find out!

EUR/JPY

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

EUR/JPY made another gap higher over the weekend after the second round of French presidential elections confirmed Macron as the winner. Price has quickly filled its gap and is now pulling back to the rising trend line visible on the 1-hour chart.

If this support area holds as a floor, price could bounce back up to the week open price at the 124.50 minor psychological level. Stronger bullish momentum could take the pair up to the top WATR close to the 126.00 handle, but stochastic is turning down from the overbought zone so price might follow suit.

  • WO: 124.50
  • Top WATR: 125.75
  • Bottom WATR: 123.26
  • PWH: 123.95
  • PWL: 121.28

GBP/JPY

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

Guppy is also on a steady climb, moving inside a short-term ascending channel on its 1-hour chart. Price just bounced off the resistance after gapping up over the weekend and could be due for a pullback to support.

Stochastic is already indicating overbought conditions, which suggests that pound bulls might want to take a break from charging. Additional volatility could be seen in the latter part of the week since the BOE Super Thursday is coming up.

  • WO: 146.58
  • Top WATR: 148.15
  • Bottom WATR: 145.00
  • PWH: 146.15
  • PWL: 143.80

EUR/GBP

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

EUR/GBP has formed lower highs and higher lows on its 1-hour chart, creating a symmetrical triangle formation. Price is testing support at the moment and stochastic is pulling up to indicate that a bounce back to resistance is in the cards.

But with the BOE statement and Inflation Report hearings lined up, a breakout could be due later this week. Note that the triangle is approximately 250 pips tall so the resulting move could be of the same size. Also, keep in mind that the pair hasn’t completely filled up its weekend gap from the other week so there may be some downside pressure building up.

  • WO: .8480
  • Top WATR: .8552
  • Bottom WATR: .8408
  • PWH: .8509
  • PWL: .8419

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