Technical Analysis – EURJPY hourly: Euro in uptrend versus the yen but correction underway
November 20, 2013 9:22 am
(click to enlarge)
Euro / yen is an important currency pair that is often used as a proxy for risk sentiment. Rising risk appetite tends to favor the euro, while risk aversion tends to favor the yen.
In line with rising risk assets, the euro has posted gains during the past 10 or so trading sessions and managed to post fresh 4-year highs as well.
The euro is in a clear uptrend versus the yen, as seen from the chart. The initial target is today’s overnight high of 135.93, which can be an area of resistance (Resistance 1).
Since hitting that level, the euro has retreated back, dipping below the short-term 21-hour exponential moving average.
If this downward correction continues and takes out Tuesday’s low of 134.59 (Support 1), it could signal further losses for the euro.
The next area of support could be the 133.21 level (Support 2). A break of that level would confirm a reversal in fortunes – at least on an hourly time frame – for the yen.
The RSI has dropped into bearish territory at 46.24 but is not yet at oversold.
To sum up, although the euro is in an uptrend against the yen, Wednesday’s price action is signaling a correction. This development could provide attractive re-entry opportunities for those confident that the euro uptrend will soon reestablish itself.
(click to enlarge)
Euro / yen is an important currency pair that is often used as a proxy for risk sentiment. Rising risk appetite tends to favor the euro, while risk aversion tends to favor the yen.
In line with rising risk assets, the euro has posted gains during the past 10 or so trading sessions and managed to post fresh 4-year highs as well.
The euro is in a clear uptrend versus the yen, as seen from the chart. The initial target is today’s overnight high of 135.93, which can be an area of resistance (Resistance 1).
Since hitting that level, the euro has retreated back, dipping below the short-term 21-hour exponential moving average.
If this downward correction continues and takes out Tuesday’s low of 134.59 (Support 1), it could signal further losses for the euro.
The next area of support could be the 133.21 level (Support 2). A break of that level would confirm a reversal in fortunes – at least on an hourly time frame – for the yen.
The RSI has dropped into bearish territory at 46.24 but is not yet at oversold.
To sum up, although the euro is in an uptrend against the yen, Wednesday’s price action is signaling a correction. This development could provide attractive re-entry opportunities for those confident that the euro uptrend will soon reestablish itself.
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