EUR/JPY shoots up to monthly R1

The European common currency appreciated 50 pips on Tuesday, thus reaching the upper wedge boundary circa 131.50 late in the evening. However, the rate was not able to sustain this sharp movement upwards and consequently entered a minor consolidation phase during the first half of this session.

This failure to edge higher along with converging technical indicators suggest that the Euro may bounce off the 131.50 area and initiate a new wave downwards. The bottom limit may be set by the 100-hour SMA at 130.30, reinforced by the closely-located monthly and weekly PPs.

Yorum:

The previous forecast for the EUR/JPY came into reality at the start of Thursday’s trading session. The currency exchange rate had passed the support of the weekly R1 and the 55-hour SMA. It was almost clear that the currency exchange rate will next approach the 100-hour simple moving average, which on Thursday noon was located at the 130.75 mark.

However, there was one development to be watched. It was the question, whether the pair will find support in the SMA or begin to decline down to the lower trend line of the rising wedge pattern. In accordance with our forecast, the two supports will meet first, before a rebound occurs.