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EUR/JPY Topping Pattern?
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Talking Points
EUR/JPY meandering below the 200-day moving average
Potential H&S pattern shaping up on the daily chart
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One of the more interesting charts at the moment is that of EUR/JPY. After finding support earlier this month at the 50% retracement of the April – June advance around 133.50 the cross has drifted about in a sideways to higher range below the 200-day moving average. This has set up a fairly clear potential head & shoulders topping pattern on the daily chart. Any weakness under the recent lows around 133.50 would confirm the negative technical pattern at work in the exchange rate and set the stage for a more important run lower in the weeks ahead. It would take strength back over this month’s spike high and the 61.8% retracement of the June – July decline around 138.00 to invalidate the potential topping pattern and signal a resumption of the medium-term uptrend in the cross.
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EUR/JPY Daily Chart: July 24, 2015
Charts Created using Marketscope – Prepared by Kristian Kerr
LEVELS TO WATCH
Resistance: 136.95 (200-day MA), 138.05 (Fibonacci)
Support: 135.15 (Fibonacci) 133.50 (Fibonacci)
Strategy: Sell EUR/JPY
Entry: Sell EUR/JPY on a daily close below 133.50
Stop: Daily close above 134.50
Target: Open
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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