EUR/GBP 1H chart 9:20AM EST 1/15/2013
Bearish continuation: Just as I caught this set up, the market broke it down. After overnight decline, USD/JPY consolidated during 1/15 US session. Forming what could be an inverted head and shoulders IF the latest 15-min candle held above 88.60 and returned to 88.94 area. Above 89.00, a bullish continuation could be considered.
However, 88.60 broken down, and now the focus is on 88.30, and possibly further bearish outlook in the short-term as the 15-min RSI holds below 60, showing maintenance of the bearish momentum from the overnight swing.
As warned in the previous observation of tops in JPY-crosses, be careful because we have not had any significant bearish correction, and markets might still be biased to buy on dips. I expect a choppy market. But if bears win out, and USD/JPY bulls get flushed out, along with risk-aversion, then a fall in JPY-crosses can be fast.
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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