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Home » Featured » EUR/JPY Attacking a key Trendline Resistance

EUR/JPY Attacking a key Trendline Resistance

Forex Technical Update

Previous: EUR/JPY hits Double Bottom Target and Previous Support Area (11/14)

EUR/JPY Daily Chart 11/15/2012 1:55PM EST

EUR/JPY 11/15/2012 daily chart

Bullish continuation? Since forming the double bottom noted in the last 2 updates, the EUR/JPY has rallied sharply over the 11/14 and 11/15 session so far. This week, the pair came up from a low of about 100.30 almost to the 104.00 handle, which is close to the October high of 104.56. The daily chart shows the RSI hold above 40, which is a sign that the bullish momentum is maintained. Now if the RSI pushes above 60, it will reflect bullish continuation momentum.

Falling wedge: As we push at this 104-104.50 resistance area, it should be noted that its a very key resistance indeed. When we check the weekly chart, we can see that is is also a declining trendline that is part of a diagonal triangle, or you might call it falling wedge. We saw an earlier test of this trendline a few weeks back that respected the trendline, but here we are again, attacking it with a sharp rally.

Breakout scenario: Clearing above the 104.56 high will be a breakout signal. In the short to medium term, this bullish breakout opens up the 108.00 handle before exposing the 111.43, 2012-high. The ability to do this turns the 4 year bearish market  (since July 2008), into a sideways one, if not bullish.

Can the market push EUR/JPY above 104.56? The 200-day SMA sits just above 102.00. If there is a throwback below this handle, the bullish outlook will have to be shelved.

EUR/JPY Weekly Chart 11/15/2012

EUR/JPY 11/15/2012 weekly chart

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.

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.

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