Thursday March 11, 2010 - 19:03:52 GMT
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FXTimes: Daily Technical Update EUR/JPY Short-term Reversal Signals
EUR/JPY Short-term Reversal Signals
- Weekly and Daily: Before discussing the short-term
scenario letâ€™s take a look at the longer term mode. The Weekly chart
shows a market in the oversold condition as it consolidates around the
61.8% retracement level.
- If a rally springs from this small base, there is resistance near
the 128.50 area. However, there does not seem to be a reversal signal
yet, and the bearish outlook exists. The market can test the 118.34 or
78.6% retracement level in another bearish week.
- The daily chart shows trouble rallying above the 123.80 level. The
stochastic is showing a strong bullish momentum from basing action, but
price action is showing trouble with a declining trendline as well.
- Despite the bullish divergence, this combination is bearish.
- 4H: The 4H time-frame shows a slight bearish
divergence with the stochastic, and the oscillator has shown an early
momentum reversal signal. Also, the market is testing its SMA200 as
well as the consolidation channel resistance, and the 78.6% retracement
- Also the current price action may be forming a double top if it
breaks below the 123.00 area. A breakt below the rising trendline
should hint at further decline towards the 118.34 area. (78.6%
retracement seen in weekly chart).
- If there is a break, there might be some near-term support at
121.50 area. Look for a pullback and if it is weak, anticipate the next
bearish attempt to break below the 121.50 area.
Commodity Trading Advisor
Information and opinions contained in this report are for
educational purposes only and do not constitute an investment advice.
While the information contained herein was obtained from sources
believed to be reliable, author does not guarantee its accuracy or
completeness. CMS will not accept liability for any loss of profit or
damage which may arise directly, indirectly or consequently from use of
or reliance on the trading set-ups or any accompanying chart analyses.
Foreign currency trading is not conducted on an exchange. CMS is
acting as a counterparty to its clientsâ€™ transactions and as a result,
CMSâ€™ interests may be in conflict with its clients. Since CMS acts as
the buyer or seller in the transaction one should carefully evaluate
any trade recommendation provided by CMS or any of its solicitors.
Foreign currency trading involves a substantial risk of loss and may
not be suitable for all investors.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
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