Took a quick break from watching the Super Bowl to line up these sweet channel setups on EUR/JPY, GBP/JPY, and EUR/GBP that might play out this week.
Euro bulls stayed in control for the past few days, allowing EUR/JPY to zoom up to the 137.50 minor psychological level. However, a correction seems to be in order and using the handy-dandy Fib tool shows the nearby buy zones.
In particular, the 50% retracement level lines up with a sweet area of interest right around the 136.00 major psychological mark. A larger pullback could find its way down to the 135.50 handle, which is closer to the ascending trend line.
Stochastic is still on its way down to indicate that buyers are taking it easy for now, but the oscillator is approaching oversold levels to signal seller exhaustion as well.
Guppy bounced off that pullback area we were watching last week, and it looks like it’s in the mood for yet another correction. It looks like the pair is moving inside an ascending channel, too!
Price could find support at the mid-channel area of interest around the 154.75 to 155.00 levels or move all the way down to the bottom of the channel at 153.75 to 154.00 before finding more buyers.
Stochastic is on its way down to indicate that pound bears have the upper hand, and the oscillator has plenty of room to head south. Keep in mind that the BOE decision is scheduled this week, so this pair could enjoy a lot of volatility.
Here’s another pair that could be in for an eventful week! EUR/GBP bounced off the mid-channel area of interest but didn’t really make it to the channel support as euro bulls charged back in.
Price has formed higher lows and now seems to be creating a new short-term rising channel as it moved past the .8800 barrier. However, the pair is already hitting resistance while stochastic is indicating overbought conditions, which suggests that a bounce is in order.
From here, EUR/GBP could make another test of the small channel support before making its way up to the big channel resistance around .8900. Think the U.K. services PMI due today might do the trick?
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