EUR/JPY 1H Chart 11/2/2012 3:35PM EDT
NFP reaction, range break: The EUR/JPY was trading near a recent range support heading into today’s (11/2) Non-Farm Payroll release. It came out 171K, beating forecast of 123K according to Forexfactory. The initial reaction reflected conventional risk-on dynamic, pushing the EUR/JPY near 103.80. However this rally proved unsustainable as the market faded the pair in the hour following the NFP release. Eventually as we wind down the week, EUR/JPY has broken this week’s range. Maybe the 103.00 psychological level can provide support, but if a pullback is prevented from pushing back above 103.50, the focus remains to the downside in the short-term
Bearish scenario: If the bearish outlook develops, a key level to break to extend further bearish outlook will be the 102.00 handle. A break below this ensures clearing below a rising trendline that started from July’s low of 94.10. It also breaks below the 200-day SMA and a recent support pivot made on Oct. 30. A break below 102 exposes that July low of 94.10, but first the support pivots of 100.15 and 99.55, between which we have the 100 psychological level. A conservative bearish outlook therefore, should be around 100.00, but first with break below 102 as confirming price action.
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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