With the U.K. elections out of the way and a number of top-tier catalysts lined up, price action on pound crosses could be more exciting than the NBA Finals this week.
EUR/JPY is still hovering at the bottom of its descending triangle visible on the 1-hour time frame. A bounce might be underway as a small double bottom pattern can be seen if you squint your eyes just right.
A break past the short-term neckline resistance at the 123.75 area could lead to a move to the triangle resistance around 124.75-125.00. However, stochastic is pointing down to indicate that sellers are in control for the time being.
- WO: 123.68
- Top WATR: 124.81
- Bottom WATR: 122.55
- PWH: 124.71
- PWL: 122.63
Guppy did bounce off that descending channel resistance I had my one good eye on last week and is now testing support, which is doing a mighty fine job of keeping post-election losses in check.Price might need to retreat to the channel resistance around the 147.50 minor psychological mark before resuming its dive. But if bears are feeling hungry, they could chomp their way through the channel support around 139.00 to start a steeper drop.
In case you missed it, Prime Minister May’s political gamble didn’t exactly pay off and it may have left the U.K. in a bigger mess than before. A hung parliament could weaken their negotiating stance in Brexit talks, which might mean a lot of losses for the pound unless May is able to turn things around.
- WO: 140.31
- Top WATR: 141.82
- Bottom WATR: 138.81
- PWH: 143.10
- PWL: 139.55
Bounce or break? EUR/GBP is now testing the very top of its long-term range resistance and has even spiked higher in the U.K. elections aftermath.
However, sellers quickly defended the .8800 barrier and allowed the pair to close back inside the daily range. Stochastic is even turning down from the overbought zone to show that sellers are regaining control and could push price back to support at the .8400 mark.
However, a clean break past the resistance could spur a 400-pip uptrend, which is the same height as the range or rectangle chart pattern.
- WO: .8815
- Top WATR: .8886
- Bottom WATR: .8744
- PWH: .8858
- PWL: .8653
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