Best Financial Markets Analysis Article In a recent Update we noted that bears in the EURJPY cross rate were looking tired, although nothing bullish had been signaled at that stage. Latest action, however, has seen a short term base complete, with a bull signal now in place.

The FX Trader’s view

WEEKLY CHART:

Recent losses approached the 76.4% 118.45 pullback level, which is sometimes effective in EUR/JPY – we have been on the lookout for a rebound phase, which now looks to be underway.

DAILY CHART:

Last time we noted that the s/term structure was suggesting bears were losing interest - ahead of the 118.45 76.4% level.

In the FX Specialist Guide we pointed out possible support from a very s/term 76.4% pullback level around 121.00, which in fact worked nicely – this proved the precursor to a break of resistance in the 125.20s.

A base is now complete, with focus turning first to temporary resistance from the 126.89 Nov-09 low and bear channel top projection just above.

However, the strength should be there to achieve higher values, though, so note the higher 130.90/131.30 Fibo retracement area which, in fact, coincides with an old textbook measuring technique.

A collapse back below 121.00 would negate the bull signal, and this level now provides a risk level for buyers on dips.

Mark Sturdy
John Lewis

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

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