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Sterling staged a strong rally towards the end of the previous week, and now I’m seeing short-term corrections from those breakouts.

EUR/JPY

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

Looks like last week’s channel resistance test was just a fake out! EUR/JPY pulled back to the mid-channel area of interest to gather more bullish momentum before making another attempt.

A move past the latest highs at 134.40 could be enough to confirm a bullish breakout and a potential reversal for this pair. However, stochastic is entering overbought territory to reflect exhaustion among buyers. If profit-taking occurs, another slide back to the nearby support levels could be underway.

  • WO: 133.56
  • Top WATR: 134.55
  • Bottom WATR: 132.58
  • PWH: 134.05
  • PWL: 132.25

GBP/JPY

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

Guppy has been able to surge past the resistance at the 152.50 minor psychological mark, zooming up to a high of 153.41 before retracing.

Applying the Fib tool on the latest swing low and high on the 1-hour time frame shows that the former resistance lines up with the 38.2% retracement level. If this is enough to keep losses in check, price could head back up to the swing high and beyond.

Stochastic is starting to pull up from the oversold region to signal a return in bullish pressure. But if a larger correction is needed, the pair could still find support at the next Fib levels.

  • WO: 151.94
  • Top WATR: 153.35
  • Bottom WATR: 150.53
  • PWH: 153.41
  • PWL: 149.77

EUR/GBP

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

This pound pair also made a clean break late last week but has since pulled up to the broken range support. Using the Fib tool also indicates that this coincides with the 38.2% retracement level.

Stochastic still has some room to head north before reaching overbought levels, so price could pull up a bit higher from here. Both the 50% and 61.8% levels are within areas of interest, which means that sellers could be waiting right there.

  • WO: .8794
  • Top WATR: .8867
  • Bottom WATR .8722
  • PWH: .8868
  • PWL: .8690

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