Forex Technical Update
EUR/JPY 4H Chart 8/16/2012 10:05AM EDT
The EUR/JPY has been rallying since finding support at 94.10 on 7/24 as seen in the 4H chart. The 4H chart also shows an RSI development that reflects persistent bullish momentum building as it tagged 70 without sustaining a break back below 40. Still this rally can be categorized as a correction/consolidation against the bear trend seen in the daily chart, where we already see a broken declining trendline that goes back to the end-of-March early-April highs.
There is a consolidation resistance now at 97.80. The market is just a few pips away at 10:00AM EDT, during 8/16 US trading. Will this resistance hold? If it does, will the market get back to testing the rising trendline? EUR/JPY is indeed at the crossroad, so we need to see which trendlines the market will break, and while it will respect.
The next immediate pivot to the upside is at 98.30. Above 98.50, we might open up the 100.00 psychological handle, as well as the next resistance pivot at 101.60. To the downside, we will probably need to see a break below 96.00 and the rising trendline in the 4H chart to continue the bearish mode, which opens up the 94.10 low.
EUR/JPY Daily Chart 8/16/2012 10:00AM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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