Forex Notes

Prev: EUR/JPY and GBP/JPY are Attempting to Build Momentum in Bullish Channels (8/17)

EUR/JPY

EUR/JPY

The 1H chart show the EUR/JPY after breaking below a recent upwards channel. However, it still may be bullish in the short-term, but maybe not as bullish as the GBP/JPY.

  • 1H RSI broke below 30, so we need to see it now rally above 60 to kill the bearish momentum.
  • Price action held above 61.8% retracement, so it was a deep correction, but one that still keeps the bullish scenario alive.
  • The 4H chart shows that the market is in medium term bearish mode because it is held below the 200SMA. However, the ability of the market to make a higher low today suggests at least a correction rally in the short-term.
  • A swing projection targets a resistance zone starting with he 61.8% retracement level at 111.80 to a pivot at 112.30.
  • IF the market breaks above 112.50, then we can talk about a bullish reversal in the medium-term


GBP/JPY

GBP/JPY

The GBP/JPY has a more bullish stance than the EUR/JPY.

  • 1H chart shows that the retracement didn't even get to 38.2% of the rising channel.
  • It is also staying above the 200SMA in the 1H chart and maintained the RSI reading above 40. This shows that the short-term bullish momentum is intact.
  • The 4H chart shows the market knowing at the 127.00 pivot. Then above 128.00, we open up the 138.80 high.
  • This should also break the RSI above 60 in the 4H chart to invalidate the bearish momentum.
  • On the downside, you see a lot of bullish push at the 125.30 pivot. If the market stays below 127, and breaks below 125.30, and then 125.00, we can be opening back up teh 123.30 low.

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Fan Yang CMT
Chief Technical Strategist
FXTimes