EUR/JPY Bulls In Control
The currency pair increased sharply as the Yen was punished by the Nikkei’s rally. Price resumed the yesterday’s impressive bullish candle and stays above some important levels, a valid breakout will signal a further increase in the upcoming period.
The Yen dropped surprisingly today as the Nikkei stock index plunged in the last hours from the 21512 today’s high. JP225 squeezed a little after the massive drop, I’ve said in the last days that we may see a minor correction on the short term.
The Yen increased in the morning, even if the Japanese trade surplus dropped unexpectedly, from 0.31T to 0.24T, much below the 0.31T estimate. The Japanese All Industries Activity increased only by 0.1% in August, less versus the 0.2% estimate. On the other hand, the Euro increased also versus the Cable and versus the greenback today.
The rate failed to reach and retest the upper median line (UML) of the major ascending pitchfork and now climbed above the outside sliding line (SL) of the ascending pitchfork and above the red uptrend line. The next target will be at the 50% Fibonacci line (ascending dotted line) and higher at the median line (ml) of the black ascending pitchfork.
Remains to see what will happen in the upcoming period because a Nikkei’s correction will force the yen to increase. We may still have a Rising Wedge pattern if the rate will slip below the red uptrend line and below the SL.
The GBP/JPY moves sideways on the short term around the 148.46 static support (resistance turned into support). The Yen increased versus the Cable today also because the Nikkei stock index plunged after the impressive rally. Remains to see what will really happen on the JP225 because a further drop will send the Yen much higher versus its counterparts. GBP/JPY will increase further if will stabilize above the 148.46 level.
USD/CAD moves sideways on the short term and looks determined to challenge the median line (ml) of the blue ascending pitchfork again. Now is pressuring the 1.2460 level and only a rejection will signal another upside momentum. Price remains steady even if the USDX plunged today and reached new lows. The perspective is still bullish as long as is trading above the mentioned support levels, but a valid breakdown will confirm a larger drop.
By Olimpiu Tuns – Market Analyst
I graduated a Master in Business Administration, I am a Market Analyst / Trader on Financial Markets (forex, commodities, futures, options) for more than 6 years, I use technical and fundamental analysis for my daily activity. Founder and Market Analyst at ovtbusiness.com (Financial Markets Blog) and contributor on investing.com, actionforex.com, countingpips.com, forexalchemy.com, etc.
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