Nick Nasad
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EUR/JPY: Is the Bottom in for Euro-Yen?

Today's ECB decision and comments by ECB President Draghi have helped give the EUR a lift.

  • Looking at the daily chart of the EUR/JPY, we see an interesting development in that today's action has broken out of a short-term range, and it looks like the pair may have been putting in a bottom.
  • A few technical factors include a bounce up off the 61.8% retracement of the full swing from November to late December.
  • A second is that the daily RSI has turned after touching the 30 level which is seen as an oversold level.
  • There are important resistance levels ahead including a pivot at 138.40 (50% retracement level) as well as 139.15.
  • The pair's bears will be monitoring those levels for re-entry. ECB dynamics aside, there needs to be a focus on equities, which this week fell sharply, and then have moved sideways between Tue-Thur.
  • The only real chance for a EUR/JPY rally would be if markets also put in a bottom.