Forex Video Briefing (7/31) – EUR/JPY, GBP/JPY, NZD/JPY
EUR/JPY looks like its shifting from a bearish trend at least into consolidation mode in the 4H chart. Price looks like it formed an inverted head and shoulders bottom, and popped up above the neckline as well as July’s falling trendline. The RSI has tagged 70, showing nascent bullish momentum. If we get a pullback, and price holds above 173, the bullish outlook should be valid in the short-term, and there should be upside risk to at least the 138.40-50 area. Just above this area will be July’s falling trendlines, so we should limit the bullish outlook below 140, maybe to 139.25 July high, where bulls will likely ease up seeing the falling trendlines.
GBP/JPY also broke above July’s falling trendline, and really above a falling wedge pattern. Unlike the EUR/JPY, which has been in a consolidation/bearish correction, the GBP/JPY has been mostly bullish in 2014 after an initial period of consolidation. Now, if price can hold above 173.00, there is a chance the breakout is still valid, with upside to at least the 174.55 and 175.36 resistance pivots. Otherwise, below 173.00, the market is likely to push at 172.60, with downside risk to 170.95-171 lows from June.
NZD/JPY is at a key level for sellers. After rallying from a low of 86.67 on the week, it has stalled at 87.58, showing respect to a falling trendline seen in the 4H chart. The RSI is at 60, so if the market is still bearish in this time-frame, we should look out for another bearish swing to attack the 86.67 low, and push lower. Note that if a bearish swing commences, we would have a negative reversal signal, where the higher highs in the RSI is matched with lower highs in price action. According to Andrew Cardwell, the RSI guru, this is a bearish signal for another low. However ,If price breaks above 87.60, it does open up a short-term bullish outlook to 88.20-88.40.