Will we see another week of yen domination or will the European currencies get back on their feet? Here are the setups I’m watching on EUR/JPY, GBP/JPY, and EUR/GBP.
Bearish pressure picked up for the euro last week, taking this pair down to the major support around the 132.00 major psychological mark. Now this area has kept losses in check since September last year, so buyers might be waiting to defend this level.
Stochastic is approaching oversold conditions also, suggesting that sellers might need to take a break. If so, a bounce to the nearby resistance at 134.00 could take place. But if the selloff continues, EUR/JPY could make its way back down to the next potential floor at the 128.50 minor psychological mark.
Guppy appears to have broken below the bottom of the rising wedge pattern I had my one good eye on last week, paving the way for a potential move to the next support zone.
The pair happens to be moving inside an ascending channel, also visible on the daily time frame. With price clearing the mid-channel area of interest, it could be on track towards the very bottom around 145.00-146.00.
Stochastic is already indicating oversold conditions, though, so a return in buying pressure could still lead to a bounce back to the top.
Aha! It’s the channel that keeps on giving! EUR/GBP bounced off the top of its descending channel on the 4-hour time frame for the nth time and might be poised for a move back to support.
Another set of top-tier data is on the docket for the U.K. this week, so we could see a few more bullish pound moves if those figures turn out better than expected.
Don’t count the euro out yet, though! The minutes of the latest ECB meeting are up for release any hawkish hints could still lead to an upside channel break for this one.
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