EUR/JPY Consolidating under Broken Trendlines
By Fan Yang | February 27, 2013 6:13 AM EST
Forex Technical Update
EUR/JPY 4H chart 2/26/2013 1:30PM EST
Consolidation: The EUR/JPY is consolidating during the 2/26 session, after a bearish 2/25 session, which was caused by the Italian election drama. The 2/26 consolidation range is between 122.33 and 118.70. A break below 118.70 therefore signals bearish continuation, and a break above 122.35 suggests more confirmation is needed for the bearish outlook.
Broken Trendlines: The daily chart shows EUR/JPY below a falling channel trendline support as well as a rising trendline going back to November. The break suggests a reversal or bearish correction is imminent, with the 117.00 and then 116.38 support pivots in sight. However, failure to extend lower, and therefore failure of the RSI to break below 40, is maintenance of the bullish momentum. A break out of the 2/26 range can help with directional outlook for the short-term (session or 2), but more so with a break to the downside than above.
EUR/JPY Daily chart 2/26/2013 1:35PM EST
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.