Strategy 06 November 2013

Potential rising wedge (bearish pattern) on EUR/JPY will complete on a close below 132.01 and introduce scope to 122.80

 

EUR/JPY we are viewing the pattern developing on the chart as a potential rising wedge pattern,
this offers resistance at 135.67 and support at 132.01. These patterns are well documented reversal patterns and this one will complete on a weekly close below 132.01. We would also highlight the large bearish divergence of the weekly RSI on it recent move to a new high of 135.52 and highlight that the market recently reversed from its very long term retracement at 135.33 (23.6% retracement of the move down from the 1979 high). We look for this to now act as tough overhead resistance. All of these factors are bearish.

A weekly close below the 132.01 level should be enough to complete the pattern and introduce scope to 122.80. (See weekly chart attached).

Near term the market is seeing a small rebound from its 55 day ma at 132.68. We look for this to be tepid. Initial resistance lies 133.65.

To know more click here PDF



 

DOWNLOADS

Please come again to check our Market Research & Reports