EUR/JPY 1H 9:15AM EST 1/29/2013
Flag: The last time I updated EUR/JPY, it was in a flag pattern, edging lower in a correction against a very bullish trend. As we get into the 1/29 US session, we can once again observe a flag pattern in the 1H chart, with price action bouncing off the pattern support with focus on the resistance.
Momentum: Note that the RSI was held above 40, which shows maintenance of the bullish momentum established by last week’s bullish swing.
If price breaks above flag pattern, and the previous resistance pivot around 122.43, AND the RSI pops back above 60, we could have a bullish continuation at our hand, or at least pressure toward the 122.90 high. A push above this and 123.00 would be a sign of bullish continuation especially if the RSI also tags 70.
If not, there is still more room to correct to the downside and still be within the context of the overall bullish trend, especially if price holds above the 120.00 handle and the 200-hour SMA.
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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