Forex Technical Update
After finding support just above 0.97, the EUR/JPY has been rallying since the last week and is now testing a pivot area from 100.75-101.00. The daily chart shows the market in a corrective rally, with the next target at the 102.60 pivot (also 32.8% retracement of the 111.60-97.02 bear run). Also, note that the RSI is nearing 60. If the market is to keep bearish momentum, resistance at the 60 reading can reflect that. Otherwise, we can be looking at a correction up toward the 50-61.8% retracement area, and a declining trendline (near but maybe just below 106.00).
The 4H chart shows that momentum has already turned bullish in this time-frame, with the market also breaking above the 200 4H simple moving average. The break above 100.00 pivot was also important. While the long-term trend is still bearish, the short to medium trend might be turning bullish, more so with a push above 101.00. As this occurs, we might get near-term overbought condition, for some corrective decline or sideways market. If the market respects the 200 4H SMA as support, the bullish scenario in the short-term will likely extend into the medium term for 102.60, or higher as mentioned above.