EUR/JPY 4H Chart 9/10/2012 10:20AM EDT
The EUR/JPY broke above a brief range last week with resistance at 99.17. The daily chart shows the market remaining in a rising channel since late July when the market bounced off the 94.10 level. Note the RSI showing not only a loss of bearish momentum by breaking above 60, but also nascent bullish momentum as it kisses 70, though above 70 the RSI shows some near-term chance for a correction.
Bullish Targets: Now as the market extends higher, there is key resistance from the June-July highs in the 101.35-101.65 area. The 200-day SMA is at 101.80. This bullish outlook is clear if there is a throwback that fails to break back below the 99.17 resistance of the previous consolidation range. A break below 99.00, puts the focus on the rising trendline, and if that breaks, we open up the 94.10 low again.
In the 4H chart, note that the RSI has been staying above 40, and tagging 70, a reflection of persistent bullish momentum. If a throwback pushes below 99.00, and the 4H RSI also dips below, the bullish momentum and outlook is lost, and if the RSI rags 30 as well, the market is range-bound to bearish, since it has been bearish before this rising channel that started late July.
EUR/JPY Daily Chart 9/10/2012 12:25AM EDT
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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