The FX Trader’s view – The EUR/JPY cross has remained weak, but the trend looks to have slowed on the approach to a long term 76.4% retracement level. There are initial, though inconclusive, signs of bear fatigue and we now await further, more conclusive signals.
- MONTHLY CHART:
The drop back from resistance near to old highs
In 2003/2004 has finally tested the long term 76.4% pullback level close to 108.00.
We currently await reaction here – 76.4% can sometimes be very effective. - DAILY CHART:
This chart shows the approach to that long term 76.4% level, with the structure hinting at bear fatigue, not surprisingly accompanied by a positive RSI divergence.
The next, more conclusive, bullish signals would come from a push above a s/term 23.6% bounce level at 112.75 (taking 127.91 02-Apr high as the start of the last downleg segment) and then a breach of the 114.16 03-Jun high.
Focus would then turn to higher resistance around the 119.63 Feb low.
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