EUR/USD Consolidates Under 1.31; EUR/JPY Surges on with 111.40 in Sight
By Fan Yang | December 13, 2012 7:55 PM EST
Forex Technical Update
EUR/USD 1H Chart 12/12/2012 11:15PM EST
Pre-FOMC drift, post-FOMC consolidation: The previous EUR/USD update noted the EUR/USD's rally ahead of today's (12/12) FOMC and Bernanke risk events. However as Bernanke took to answering questions during, we saw the pre-FOMC drift hit a wall. Post-Fomc and Bernanke, the euro-us dollar was unable to push above 1.31, consolidating under it this psychological clip.
Weak correction: However, as we get into the 12/13 Asian session, we see that the bearish correction has been weak, bringing price back to 1.3060 before finding some near-term support. If the market can hold above the 1.3050 clip, it is focused on the 1.31 handle, a break above which opens up the 1.3126 December high. Above that, the next couple of resistance pivots are 1.3135 and 1.3170. Only a break below 1.30 should re-introduce a bearish outlook in the short-term.
EUR/JPY blasts through consolidation: The trend in EUR/JPY has been very bullish lately. This week's rally from around 106.00 has been sharp, stalling briefly around the FOMC-Bernanke event risks, but blasting through intra-day resistance to 109.35 by early 12/13 Asian session.
EUR/JPY Weekly Chart 12/12/2012 11:15PM EST
Looking at the weekly chart, let's go back a month when we broke above 104.60 resistance and a falling trendline signaling a bullish signal of a large degree. So far this has followed through, and we broke above the 108.00 handle this week. At this point, the next key resistance is in the 111.40-111.45 area, which is both the 2012 high and Oct 31 resistance pivot. Sure in the daily and lower time-frames, the Euro-Japanese yen looks overbought and could be due for some correction, but until then, the bullish outlook has 111.40-111.45 in sight.
Getting back to this level will basically conclude a 2012 year of 2 completely different halves, with the first half seeing a sharp decline and the second half seeing that decline completely reversed. Can this be a sign of even further bullish intent going forward in 2013? In my opinion it is definitely worth considering this possibility.
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.
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