I’m seeing plenty of pullback opportunities on the 4-hour charts of EUR/JPY, GBP/JPY, and EUR/GBP. Any catalysts that could allow the trends to resume this week?
It looks like sellers are gaining the upper hand on EUR/JPY after that tight match earlier on. Price broke below consolidation and is now setting its sights on the longer-term channel support around the 134.00 mark.
Stochastic is on its way down to confirm that euro bears have the upper hand, but the oscillator is closing in on oversold conditions. A return in buying pressure could take the pair back up to the resistance around 138.00 or at least until the mid-channel area of interest.
Preliminary CPI and flash GDP readings are due from the region’s top economies this week, so these should provide some clues on how future ECB policy might be shaped. As for the yen, the lower-yielding currency might take its cue from sentiment or price action of its rival, the U.S. dollar.
Guppy is still in correction mode as price seems to be in the mood for a larger pullback to the longer-term trend line visible on the 4-hour time frame.
The Fib levels from last week are still looking valid since the pair didn’t really make any new highs. A test of the area of interest around 152.50 to 153.25 appears to be underway while stochastic continues to head south.
Turning back up from the oversold levels could draw buyers back in the game and allow the pair to bounce to the swing high and beyond. On the other hand, a break below the trend line and area of interest could mark the start of a reversal.
EUR/GBP has tumbled all the way down to the bottom of the channel after breaking below the double top neckline we were eyeing last week. A bounce could take price up to the Fibs or all the way to the channel resistance closer to the .8900 handle.
However, the mid-channel area of interest might be enough to keep gains in check as this coincides with the 50% Fib and the .8800 major psychological resistance. At the same time, stochastic is already dipping into overbought territory.
Manufacturing and construction PMI readings are lined up from the U.K. during the latter half of the week while the euro zone has its flash CPI readings due, so it could be another volatile one for this pair!
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