11 Oct 2013
EUR/JPY, bullish momentum points towards 133.20 and beyond...
FXstreet.com (Barcelona) - After a prolonged sentiment-driven move off multi-year highs at 135.00, EUR/JPY saw a robust recovery ahead of 131.00/131.20, a significant technical junction where an ascending trendline off June lows was crossing.
At the same time, the latest rebound in EUR/JPY - courtesy of a 6-week debt deal proposal by the Republicans - saw a descending trendline coming from aforementioned year high being broken, resulting on further impulsive pushes towards 133.00.
Keep in mind that reflects a change in the prevailing bearish momentum, likely to make it a lot harder for sellers to come back to this market as enthusiastic as they have been. Sellers had an golden opportunity to inflict some technical damage by breaking the descending trendline yet failed to deliver.
The fact that EUR/JPY has been for more than 24 hourly candles displaying a relentless upward motion comes to show how strong the momentum is. One pattern having repeatedly manifested on the walk north is that each time sellers have tried to push lower off 131.20 - 4 attempts - a sequence of 20 pips pullbacks has been noted before dip buying resumed the uptrend.
As to the prospects to further extensions, Valeria Bednarik, Chief Analyst at FXstreet.com, notes: "In the 4 hours chart technical readings maintain a quite strong bullish tone, with a break above 133.20 resistance, supporting a retest of September high of 134.93." On the downside, plenty of work needs to be done for sellers to get back in dominance, with 132.50 (20-hourly EMA), 132.00 (Oct 9 peak) and 132.50/60 (intersection rising/failling trendlines) as main support zones.
At the same time, the latest rebound in EUR/JPY - courtesy of a 6-week debt deal proposal by the Republicans - saw a descending trendline coming from aforementioned year high being broken, resulting on further impulsive pushes towards 133.00.
Keep in mind that reflects a change in the prevailing bearish momentum, likely to make it a lot harder for sellers to come back to this market as enthusiastic as they have been. Sellers had an golden opportunity to inflict some technical damage by breaking the descending trendline yet failed to deliver.
The fact that EUR/JPY has been for more than 24 hourly candles displaying a relentless upward motion comes to show how strong the momentum is. One pattern having repeatedly manifested on the walk north is that each time sellers have tried to push lower off 131.20 - 4 attempts - a sequence of 20 pips pullbacks has been noted before dip buying resumed the uptrend.
As to the prospects to further extensions, Valeria Bednarik, Chief Analyst at FXstreet.com, notes: "In the 4 hours chart technical readings maintain a quite strong bullish tone, with a break above 133.20 resistance, supporting a retest of September high of 134.93." On the downside, plenty of work needs to be done for sellers to get back in dominance, with 132.50 (20-hourly EMA), 132.00 (Oct 9 peak) and 132.50/60 (intersection rising/failling trendlines) as main support zones.