Best Financial Markets Analysis Article For the last few months the EUR/JPY cross rate has been range-trading, unable to push above key overhead resistance. Just recently there was a clear break of a key support area, tipping the scales in the shorter term bears’ favour.

The FX Trader’s view

MONTHLY CHART:

This year’s recovery failed just ahead of the old highs from 2003/2004 and the 141.00 50% retracement level.

Repeated failure to break through this has recently led to an initial bear signal on the Daily chart.

DAILY CHART:

Last week there was finally a clear bear break below key support around the 129.75/130.00 area.

This initially opened the way for a test towards the 50% pullback level –but the strength should be there to push lower in due course.

Note the lower 1.618 swing projection (from the Oct 129.01-138.51 upleg) around 123.14, for example.

Overhead, the 50% bounce level at 132.70 offers possible resistance to a s/term rally – it doesn’t matter that the former key support level has been surpassed by the s/term bounce; the damage has already been done.

Any sellers into that 50% level would likely have initial stops just above the 135.71 04-Nov high, as a recovery through here would certainly negate the bear analysis.

Mark Sturdy
John Lewis

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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