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EUR/JPY Trying to Round out a Bottom

The EUR/JPY has been bearish, in the short-term. From April's high of 142.47, EUR/JPY fell below 138.50, but is now trading just under 139.00 as it consolidates.

(eurusd daily chart, 5/26)

The daily chart shows that it has broken below a rising trendline and the 200-day SMA. This suggests the market has already shifted from bullish to neutral, and may be developing a bearish correction against last year's bullish mode.

If the market does push lower, the 136.21 is the 2014-low and the next key level traders will be monitoring for support. 

(eurjpy 4h chart)

Before extending lower, the EUR/JPY appears to be working at a rounded bottom in the 4H chart. If price can cross and stay above the 50-SMA in the 4H chart and also stay above 1.39, there is upside toward the 139.90-140.20 pivot area in the short-term. Then a break back below 138.60 reflects a bearish market toward the 138 handle, and possibly the 136.21 low.

Also, look for the 4H RSI to hold under 60. This would be a sign that bearish momentum is maintained in the 4H chart.

The let's see if traders will keep the pair bearish. Otherwise, a break above 140.25 for example, puts the focus on 140.90-141 area. This is still within the mode of consolidation, but a break above 141 should open up a bullish outlook toward 142, 142.50 resistance, and then the 2014-high just below 144.80.