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Now that the ECB and BOE statements have passed, euro and pound pairs seem to be back in consolidation. Here are the setups I’m looking at this week.

EUR/JPY

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

Euro bulls aren’t giving up as this pair continues to form higher lows and slightly higher highs, creating a rising wedge formation on its 1-hour time frame. The lack of major catalysts from both the euro zone and Japan this week could keep consolidation in play.

Price is currently testing support and could be due for another climb to the top, which is close to the 132.00 major psychological mark. If this holds as a ceiling, EUR/JPY could make another test of support or attempt to break lower.

  • WO: 130.32
  • Top WATR: 131.36
  • Bottom WATR: 130.35
  • PWH: 131.40
  • PWL: 129.54

GBP/JPY

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

I’m still feeling bummed out about closing my Guppy short position ahead of the BOE decision last week as price dropped like a rock back to the 144.50 minor psychological level after pulling back to the broken double top neckline.

Price is now forming a descending triangle and currently testing support, possibly even considering a break lower. This chart formation is around 300 pips tall so the resulting breakdown could be of the same height.

On the other hand, if pound bulls defend the floor really well, another bounce back to the resistance near 146.00 could take place. There’s not much in the way of top-tier data from the U.K. but the path of least resistance might be to the downside as fundamental factors include Brexit woes and a less upbeat BOE bias.

  • WO: 144.27
  • Top WATR: 145.67
  • Bottom WATR: 144.42
  • PWH: 146.78
  • PWL: 144.24

EUR/GBP

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

Remember that EUR/GBP rising channel that I’m keeping my one good eye on? Well, it looks like the pair ain’t in the mood for a correction and might be gunning for an upside break instead.

Price seems to be edging past the channel resistance around the .9000 area but stochastic is already indicating overbought conditions and is turning lower. If euro bulls run out of steam, another shallow correction to the mid-channel area of interest could draw more buyers to the game.

But if bulls are eager to charge, they could push for a break past the .9050 minor psychological mark and take price to the .9100 barrier next.

  • WO: .9025
  • Top WATR: .9093
  • Bottom WATR: .8957
  • PWH: .9055
  • PWL: .8923

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