Forex Technical Update
The EUR/JPY rallied from 104.43 to 107.03 in an abc wave fashion seen in the 4H chart. Relative to the latest down swing, this was a 78.6% retracement. The 4H chart also shows that the RSI is held below 60 and attacking 40. A return below 40 reflects bearish continuation momentum. Price action made a lower high, but the RSI reading made a higher high. This is known as a negative reversal signal and suggests we have another leg in this bear run.
A conventional swing projection targets the 105.00 area.
The daily chart shows lower support levels, with 50% retracement of the 97.03-111.42 rally at 104.22. Then a more important support cluster resides around 102.50, with 61.8% retracement and a previous pivot area here.
Fan Yang CMT is a trader, educator and a Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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