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I’m seeing new trends forming on EUR/JPY, GBP/JPY, and EUR/GBP, but I’m inclined to wait for these pullbacks to pan out. What do you think?

EUR/JPY

EUR/JPY 4-hour Forex Chart
EUR/JPY 4-hour Forex Chart

Euro bears are starting to take control of the game for this pair, pushing for a sharp selloff late last week to break below the 132.00 handle.

EUR/JPY now seems to be trading inside a shallow descending channel on its 4-hour time frame and is currently testing the bottom. A bounce could still take it up for a test of the mid-channel area of interest near 132.50 or the top of the channel around 133.50.

Stochastic is already indicating oversold conditions, which means that sellers could take it easy and let buyers take over from here. But if bearish momentum stays in play, a break below the channel support and a steeper selloff could ensue.

  • WO: 132.19
  • Top WATR: 133.18
  • Bottom WATR: 131.21
  • PWH: 133.89
  • PWL: 131.93

GBP/JPY

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

Guppy finally broke below the symmetrical triangle consolidation pattern from the previous week to indicate its plans to head further south.

Price is now moving inside a descending channel as well and testing support around the 148.00 major psychological mark. A bounce off this level while stochastic pulls up from the oversold region could take the pair up to the top around 149.00 or at least until the mid-channel re of interest.

  • WO: 148.23
  • Top WATR: 149.54
  • Bottom WATR: 146.91
  • PWH: 149.69
  • PWL: 147.94

EUR/GBP

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

This pair is hovering around the area of interest I was eyeing last week, still deciding whether to make a bounce back to the swing high or go for a test of the lower levels close to the .8800 handle.

Stochastic looks ready to turn higher and reflect a return in bullish pressure that would validate the upside triangle breakout. This chart pattern is approximately 500 pips tall so the resulting rally could be of the same height.

If euro bears and pound bulls remain in control, however, price could still go for a downside break of the range support at .8800. Bear in mind that a few top-tier U.K. events are on this week’s docket!

  • WO: .8918
  • Top WATR: .8989
  • Bottom WATR .8847
  • PWH: .9013
  • PWL: .8847

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