Forex Technical Update
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EUR/JPY 1H Chart 8/29/2012 9:35AM EDT
The EUR/JPY has transitioned form a declining wedge consolidation into a range-bound consolidation with resistance at 98.23 and support at 97.90 as seen in the 1H chart. The support is not very flat, and the chart shows that there have been lower and lower pivots. The resistance however have been flat since August 23.
The 1H RSI actually shows persistent bearish momentum in the near-term as the reading holds below 60 and has tagging 30. If the 98.82 resistance holds, and the market falls below 98.38, it is likely that it is staying bearish with focus on 97.90/98.00 area. A break below 97.90 opens up 97.50 and the rising trendline seen in the 4H chart.
It should be noted that the recent near-term bearish momentum is seen as consolidation momentum in the 4H chart below, as the RSI is stuck between 40 and 60. Thsi consolidation follows a bullish market since late July and through August. Note that the RSI reading has tagged 70 and held above 40 aside from some brief violations.
A break above 98.82 opens up the 99.17 high, above which, the 100 psychological handle is the next key level. The bullish continuation actually opens up even higher resistance at 101.35-101.65, previous consolidation and June highs.
EUR/JPY 4H Chart 8/29/2012 9:45AM 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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