I’ve zoomed out to the longer-term charts of EUR/JPY, EUR/GBP, and GBP/JPY to spot key inflection points on these big moves. Take a look!
Euro bulls are still on a roll, with dovish BOJ expectations and more upbeat ECB remarks on this week’s docket.
EUR/JPY zoomed all the way past the 130.00 major psychological handle late last week before retreating slightly on profit-taking. Price could dip until the nearby 38.2% Fib at the bottom WATR and 127.50 minor psychological level before more buyers hop in and allow the climb to resume.
Stochastic has already pulled up from the oversold region to signal that bullish momentum is kicking back in. In that case, the PWL might already be enough to hold as support and take the pair past the swing high.
- WO: 129.02
- Top WATR: 130.13
- Bottom WATR: 127.91
- PWH: 130.77
- PWL: 128.49
Guppy has been able to hold on to its recent gains thanks to upbeat U.K. employment data, but the pair still seems to be having trouble making new highs.
Looking at the pair’s daily time frame shows that it is trading right below the resistance of an ascending triangle pattern. Stochastic is indicating overbought conditions, which could bring pound bears back in the game later on.
If so, price could break below its PWL and go for a test of the triangle support later on. But if bulls keep charging, a break past the top WATR could be enough to confirm that a longer-term climb is underway.
- WO: 147.32
- Top WATR: 148.77
- Bottom WATR: 145.87
- PWH: 147.77
- PWL: 145.29
EUR/GBP broke below the ascending channel pattern I was watching on its shorter-term time frames, but the areas of interest visible on the daily chart still suggest limited downside.
Stochastic is pointing down to signal that sellers are in control of price action for now. However, price is also stalling at an area of interest which is close to the 38.2% Fibonacci retracement level and the bottom WATR at the .8700 mark.
A bounce off this area could take EUR/GBP back up to the swing high near the .8950 minor psychological level but a deeper pullback could still find support around .8550 or until the broken falling trend line.
- WO: .8842
- Top WATR: .8907
- Bottom WATR: .8778
- PWH: .8861
- PWL: .8757
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