Forex Technical Update
EUR/JPY 1H Chart 8/20/2012 8:10AM EDT
The EUR/JPY is in a near-term sideways market for the last 2 global sessions. The 1H chart shows that after breaking above the 97.80 pivot, the market stalled at the 98.30 pivot, and started trading roughly between these two levels. There were about 3 failed attempts to clear above 98.30. To some, this constitutes as a triple top.
There may be some bearish pressure in the near-term toward 97.47, a previous resistance pivot. Though this puts in a near-term top, it does not take away the short to medium term bull run that is developing. There is a rising trendline seen in the 4H chart near 96.50. Only a break below this opens up a bearish outlook outside of the near-term intra-day price action. But let's say we do put in a triple top, and then the market pulls back up and holds below 98.00, we should consider the bearish outlook to be more probable and look for the market to test that 96.50/rising trendline area.
Also note that the 1H RSI is at 40. A break below that breaks the bullish momentum of the latest swing. If the market remains bullish, there should be an upturn here with price bouncing off range support and RSI bouncing off its bullish momentum support. In this scenario, the market is simply in a consolidation range, with trend going up, and therefore, a bias for the upside break
EUR/JPY 4HChart 8/20/2012 8:15AM 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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