Forex Technical Update
EUR/JPY 1H Chart 9/12/2012 8:45AM EDT
The EUR/JPY is starting to rally again after a brief consolidation seen in the 1H chart since 9/6. The breakout occurred during the 9/12 European session, when the German court ruling basically gave the ESM a go. The euro firmed across the board. EUR/JPY had a brief retest of the consolidation zone, but bounced back up to confirm the breakout.
The next key resistance lies in the 101.35-101.65 area, the highs in June's during a consolidation period. Note the 200-day SMA just above this resistance area. As the daily and 4H RSI climbs above 70, and the market approaches these key resistance levels, maybe we should monitor the EUR/JPY for some retracement. A bearish outlook within the rising channel seen in the daily chart, should probably be limited to 100, or at most the 99.13 pivot.
Fed policy implication: If the Fed does implement QE3, the EUR/USD might rally sharply, but the EUR/JPY might have trouble with this resistance. This is because safe haven flow is likely to come out of the USD and into the JPY, keeping the Japanese yen strong.
EUR/JPY Daily Chart 9/12/2012 8:58AM 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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