Previous: EUR/JPY Reaches Breakout Targets and 12-Year Low (7/22)
EUR/JPY 1H Chart 7/25/2012 11:40AM EDT
The EUR/JPY is off a 12-yr low, and holding above 94.00 this week so far. It is also held below 95.22, establishing a near-term consolidation range seen in the 1H chart. If we break the range into 3rds, we are trading in the top 1/3 of the range right now, which means there is a tendency to return back toward middle and therefore the market has a near-term bearish tendency at the time of the screenshot, though there is near-term upside risk to the range resistance at 95.22.
It should also be noted that the trend coming into this consolidation is extremely bearish. But the RSI popped up above 60, reflecting a loss of bearish momentum in the very short-term.
The 4H chart shows the bearish market intact, trading in a declining channel. A break below the 94.00 handle should expose 93.00, which is roughly the range-breakout projection target.
IF we get a bout of risk-on trading, and EUR/JPY pops up above 95.22 AND the declining channel resistance, we expose an upside correction toward 98.50, a previous support pivot. The 200-HR SMA resides here as well as the 61.8% retracement of July’s bear run (98.60). Before these resistance factors, we should probably monitor the 96.15 and 97.35 pivots as well.
EUR/JPY 4H Chart 7/25/2012 11:45PM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of rex 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.
