The euro is making quite a splash this week as it has been gaining across the board. Let’s take a look at the EUR/JPY in particular as it tags key trendline.
The 4H chart shows a market accelerating higher forming a price bottom as it breaks above the 131.70 resistance. While price action looks sharply bullish, we can see that this is still a young bullish attempt as the moving averages are still mostly moving sideways. If there is a strong pullback, a bullish market should hold above 130 and the 4H RSI should hold above 40. If price falls below 129, we would very likely have a bearish continuation especially if the RSI also tags 30 again.
Now, on the daily chart, we see another challenge to the bullish outlook. We can see that EUR/JPY is now testing a falling trendline coming down from the December and 2014 high at 149.51. We should expect some near-term bearish attempt, maybe during the April 30 session. However, note that the daily RSI has broken above 60 and is about to tag 70. This shows a shift from a bearish trend at least to a sideways market if not bullish.
If EUR/JPY retreats, let’s keep our key on the 130 area and get ready for a bullish attempt to eventually break the falling trendline.
Previous Post by Author: June Hike Door is Open, but Don’t Expect the FOMC to Walk Through