EUR/JPY Daily Chart 10/18/2012 7:35AM EDT
Sharp rally: The EUR/JPY is making a new high since rallying from the July low of 94.10, as it pushes above the 103.86 resistance pivot. The rally has been holding above a rising trendline, and the RSI has tagged 70, now a 3rd time, without falling under 40, and even staying above 50. This strong rally has a recent 6-day streak that is now attacking a falling trendline that goes back to April, 2011 as it approaches the 104.00 psychological handle.
Falling wedge, trendline: The weekly chart shows a falling wedge development with support extending back to August 2010, and the resistance trendline going back to 123.31 in April 2011. The falling trendline is what the market is focused on at the momentum.
Breakout: Will the trendline hold? I think there is upside room until 105.25, 38.2% retracement for the market to show respect to this falling trendline. But above that, the market opens up a previous resistance pivot lies at the 108.00 handle.
If the market holds under 105 and falls under the rising trendline from July, 94.10 low, then a bearish outlook returns.
Bearish momentum: Also note that the weekly RSI is approaching 60, during the falling wedge, it has respected 60, and reflected persistent bearish momentum. If this wedge is to hold, it should hold the weekly RSI under 60 as well.
EUR/JPY Weekly Chart 10/18/2012
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.
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.
Copyright FX Times All rights reserved.
Most Popular Slideshows
- Omar Borkan Al Gala: Facebook Page Recovered, “Too Handsome” Guy “Too Hot” He Could Reach Staggering One Million (1M) Followers in Days!
- Robert Pattinson-Kristen Stewart: Twilight Lovers To Bring Back Love at 2013 Cannes Festival [PHOTOS]
- Angelina Jolie Double Mastectomy: Other Celebrities Who Also Went Through the Surgical Procedure [PHOTOS]
- IN PHOTOS! A Picture of Sadness in Kristen Stewart as Robert Pattinson Celebrates 27th Birthday ALONE? [SLIDESHOW]