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.
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