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I spy with my one good eye a couple of break-and-retest plays and a potential consolidation break. What do you think of these short-term setups?


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

Euro bulls are taking a much-needed break from their recent post-French election rallies, trying to decide whether to resume the charge or to let bears take over from here.

Price has formed lower highs and higher lows on its 1-hour chart, creating a short-term symmetrical triangle formation that looks like a bullish flag on longer-term time frames. An upside breakout past the resistance around the 124.00 mark could confirm that bullish pressure is still in play while a breakdown could indicate that a larger pullback is due.

Stochastic is already turning down from the overbought zone to indicate that sellers are trying to gain the upper hand. If buyers put up a fight, the nearby support zones at the PWL and bottom WATR could still keep losses in check.

  • WO: 123.70
  • Top WATR: 124.86
  • Bottom WATR: 122.53
  • PWH: 124.54
  • PWL: 122.98


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

Pound bulls seem to have run out of energy as Guppy just broke below the short-term rising trend line visible on its 1-hour chart. The pair could pull up for a quick retest of the broken support before heading further south, though.

Stochastic is already indicating oversold conditions and is starting to point up to show that sellers are pausing from the recent dive. Support at the week open price and PWL appears to be holding also.

Applying the Fib retracement tool on the latest swing high and low reveals that the 50% level lines up with the broken trend line around the 147.00 handle. A larger pullback could last until the 61.8% Fib, which is close to the top WATR and a short-term support zone.

  • WO: 145.80
  • Top WATR: 147.31
  • Bottom WATR: 144.30
  • PWH: 148.11
  • PWL: 145.66


EUR/GBP 4-hour Forex Chart
EUR/GBP 1-hour Forex Chart

EUR/GBP pulled up from its dive after breaking below its symmetrical triangle formation on the 4-hour time frame. It is currently testing the broken support around the PWH, which might hold as a ceiling.

If so, EUR/GBP could resume its slide back to the bottom WATR or PWL. Stochastic is indicating overbought conditions after all so the correction might already be complete. If not, the pair could continue to climb until the top WATR and beyond.

The U.K. economy has several top-tier reports lined up this week, not to mention a speech by Prime Minister May herself. It looks like the pound wasn’t too impressed by the BOE Super Thursday last week so let’s see if pound bears could keep the pressure on for another week.

  • WO: .8484
  • Top WATR: .8554
  • Bottom WATR: .8415
  • PWH: .8489
  • PWL: .8384

Q1 2017 Trading Performance Review
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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.