I’m zooming back in to the short-term charts of EUR/JPY, GBP/JPY, and EUR/GBP to spot potential trend continuation opportunities. Take a look!
Bearish pressure is still in play for the euro, keeping this pair cruising lower inside a descending channel formation. Price has bounced off support and gapped up over the weekend but could encounter upside roadblocks at the Fib levels.
In particular, the 50% Fib is right smack in line with the 132.00 major psychological mark, which might be enough to keep gains in check and allow the selloff to resume. A higher pullback could reach the 61.8% Fib at the channel resistance.
Stochastic is pulling up to show that sellers are taking it easy and letting buyers have the upper hand for now. But once the oscillator hits overbought levels and turns back down, selling pressure could return and lead to a dip back to the swing low or channel support.
Guppy is taking things slow since that rising wedge breakdown from the other week. Price is currently moving inside a range with support around the 148.50 minor psychological mark and resistance near 151.00.
The pair gapped up over the weekend to signal that bulls are eager to kick things off this week. This could provide enough momentum for a move all the way up to the top of the range while stochastic also moves north.
If sellers rush in to fill the gap, though, price could make another test of the range support and perhaps even push for a break lower. In that case, GBP/JPY could fall by the same height as the rectangle pattern.
I’ve been highlighting the descending channel on this pair’s 4-hour time frame for a few weeks already, then when I zoomed in to the 1-hour chart, I spotted another one!
Price is testing the bottom of the channel around the .8800 mark and could be due for a bounce since stochastic is already indicating oversold conditions. A brief pullback to the channel resistance could be seen, drawing more sellers back in.
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