The lack of top-tier market catalysts from both the euro zone and the United Kingdom this week could put the spotlight back on political headlines. Check out these potential plays on the crosses!
EUR/JPY looks exhausted from its climb as it failed in its last two attempts to break past the resistance just below the 126.00 handle, creating a double top formation.
Price has yet to break below the neckline at the 123.50 area before confirming the potential selloff. This chart pattern is around 250 pips tall so the resulting downtrend could last by the same number of pips.
Note, however, that stochastic already indicating oversold conditions so euro bears must be feeling tired. Keep in mind that most of the reports from the region have been better than expected, which suggests that the shared currency is supported by fundamentals.
- WO: 124.32
- Top WATR: 125.47
- Bottom WATR: 123.17
- PWH: 125.83
- PWL: 122.52
Guppy is still trending lower, moving inside a descending channel on the 1-hour time frame. Price is testing support and could be due for a correction to the resistance.
Applying the Fibonacci retracement tool on the latest swing high and low shows that the 61.8% level lines up with the channel resistance while the 50% level coincides with an area of interest around the 144.00 mark.
Stochastic is heading north, which suggests that bulls are still in control for now, but the oscillator is nearing the overbought zone to suggest rally exhaustion.
In that case, the pair could resume its drop to the previous lows or even break below the channel support soon.
- WO: 142.50
- Top WATR: 144.02
- Bottom WATR: 140.99
- PWH: 145.27
- PWL: 141.91
This pair might be ready to resume its selloff soon as it closes in on the top of the range visible on the 4-hour time frame. Resistance is located around the .8750-.8800 area, which might push price back down to the range support near .8400.
Stochastic is already indicating overbought conditions and looks ready to turn lower so EUR/GBP might follow its tracks. There are no major reports from the euro zone and the U.K. in the next few days so ranges could hold, unless there are any major surprises from the headlines.
- WO: .8728
- Top WATR: .8798
- Bottom WATR: .8659
- PWH: .8742
- PWL: .8589
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