EUR/JPY
The EUR/JPY 4H chart shows the market reaching back toward the 2012 high at 102.20. This came after a bearish correction that found support between 50% and 61.8% retracement. Today’s price action is signaling bullish continuation. The RSI pushed above 60, and a tag of 70 establishes bullish momentum again after failing to establish bearish momentum when the RSI missed 30. Let’s look at the daily chart for bullish target/resistance levels.
The daily chart shows that the short to medium term rally we have seen so far since mid January is in the context of a bearish market with a trendline going back to April 2011. The RSI needs to break above 60 to show loss of bearish momentum – it is getting close. For the bullish scenario in the short-term, first the EUR/JPY needs to break above the 102.50 pivot. A swing projection targets 104.30-104.60 area containing the 50% retracement a pivot area (lows from Oct 18-26), and is near the declining trendline.
GBP/JPY
As I write this update, the 4H GBP/JPY chart shows that the market has already dealt a new 2012 high by breaking the previous 121.97 pivot and pushing above 122. Like the EUR/JPY, the RSI shows re-establishment of bullish momentum, and price action suggests bullish continuation. In the GBP/JPY case, the retracement was at 50% before the market found support.
The daily chart shows the first resistance at 122.70 pivot. Above that a swing projection targets 124.35, which is near the 200 day SMA. 61.8% retracement at 123.48 is a resistance favor, but it is not reinforced. If the RSI climbs back above 70, we can confirm bullish momentum. In a sideways market, we can be looking at this short-term bull run toward 126.50-126.60 pivot zone.
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Fan Yang CMT is the Chief Technical Strategist for IBTRADE, trader, educator and a main contributor 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.0
