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European currencies were unable to hold on to their gains from the other week, bouncing off nearby resistance levels. Can the declines carry on?

EUR/JPY

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

I guess the Force wasn’t strong enough on this one! EUR/JPY was unable to break past the resistance at the top of its descending channel on the 1-hour time frame, sliding back down to the mid-channel area of interest again.

Stochastic is already indicating oversold conditions so a bounce back to the top might take place. However, price has formed lower highs, which suggests that euro bears might be gaining more energy, especially after ECB Overlord Draghi refrained from dropping rate hike hints last week.

  • WO: 132.43
  • Top WATR: 133.40
  • Bottom WATR: 131.46

GBP/JPY

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

Guppy also fell back down after its attempt to bust through the ceiling at the 152.50 minor psychological mark. Price is halfway through a new range that’s forming on the 1-hour time frame and could be due for a move towards support at 147.75.

If pound bulls charge again, another test of the resistance might take place. Stochastic is pulling up from the oversold region after all, indicating that sellers are taking a break.

  • WO: 150.08
  • Top WATR: 151.48
  • Bottom WATR: 148.68

EUR/GBP

EUR/GBP 1-hour Forex Chart
EUR/GBP 1-hour Forex Chart

EUR/GBP appears to be slowly falling into the Dark Side as a descending channel is forming on its short-term chart. Price just bounced off support and has pulled back to the 50% Fib near the mid-channel area of interest.

A higher correction could lead to a test of the 61.8% Fib closer to the actual top of the channel, but stochastic is already signaling the presence of bearish momentum that could take the pair down to the swing low near the .8700 handle.

  • WO: .8822
  • Top WATR: .8892
  • Bottom WATR .8752

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