EURJPY : SET FOR A CORRECTION
- The market has been registering higher highs and lows since beginning of May ; the short-term trend is then bullish.
- The sharp market rally that saw prices climbing 4.14% higher from 164.000 to 170.800 seems to be losing momentum.
Indeed, the bearish divergence displayed by the RSI indicator, and the fact that new highs were registered with less and less strength tends to indicate a trend slowdown here.
Since the impact below 170.800, sellers have taken control of the market, in a price action also fueled by take profit moves.
The market now trades slightly above the 169.33/169.18 zone, the first major short-term support for prices.
The RSI now evolves far below its 50% level, while the moving averages are reversing to the downside.
- It is hard to say if the correction will continue deeper or if the market will keep on rebounding over the 23.6% Fibonacci zone for now.
However, in the even of a break-out of the 169.33/169.18 level, a new bearish potential towards 168.18 and 167.38 would be unlocked.
That said, tomorrow's EU CPI figures should bring more market volatility, especially as investors already anticipate firmer inflation numbers.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
- The sharp market rally that saw prices climbing 4.14% higher from 164.000 to 170.800 seems to be losing momentum.
Indeed, the bearish divergence displayed by the RSI indicator, and the fact that new highs were registered with less and less strength tends to indicate a trend slowdown here.
Since the impact below 170.800, sellers have taken control of the market, in a price action also fueled by take profit moves.
The market now trades slightly above the 169.33/169.18 zone, the first major short-term support for prices.
The RSI now evolves far below its 50% level, while the moving averages are reversing to the downside.
- It is hard to say if the correction will continue deeper or if the market will keep on rebounding over the 23.6% Fibonacci zone for now.
However, in the even of a break-out of the 169.33/169.18 level, a new bearish potential towards 168.18 and 167.38 would be unlocked.
That said, tomorrow's EU CPI figures should bring more market volatility, especially as investors already anticipate firmer inflation numbers.
Pierre Veyret, Technical Analyst at ActivTrades
The information provided does not constitute investment research. The material has no been prepared in accordance with the legal requirements designed to promote the independence of investment research and such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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