FX TECHNICAL ANALYSIS CURRENCY OUTLOOK MAJOR CROSS-RATES - FEATURED MARKET - EUR/JPY.
EUR/JPY extended the strong advance from the year 2000 bottom at 88.97 (not shown) beyond the 1998 (calculated) peak of 163.34 to reach peaks of 169.05 & 169.96 in 2007 & 2008. An 18 month top pattern was completed during September 2008, with a steep decline to 113.74 & 112.08 lows in October 2008 & January 2009 having been followed by a rally which leſt a 6 month+ lower (triple) top around the 138.49-139.14 area during 2009. A resumption of losses occurred from there and this reached 105.46 & 100.78 lows in August 2010 & October 2011, interrupted by a lower top at 123.32 in April 2011. Although the recent 100.78 low was almost spot-on the 112.08-105.46 support line from
where there was a recovery to 111.67, MACD has remained primarily bearish and the speed / extent of the reversal from 111.67 has warned of a continued retreat heading into the new year. Te risk is for a return towards the 2000 bottom at 88.97, although the base of a projected 2 year+ bear channel (drawn off 138.49 & 123.32 highs, paralleled with the 105.46 low) offers interim support. Tis currently comes in at 92.08, falling by .20 per week. To avert the immediate risk of further losses we would need to see not only 111.67 but also former resistance at 115.65 overcome. However, at present a rally towards those levels would be classed as a corrective move to develop a lower top below 123.32, ahead of a renewed retreat.
MAJOR TRENDS AND TARGETS FOR MAJOR CROSS-RATES As at 09 December
EUR/GBP GBP/JPY EUR/JPY EUR/CHF EUR/NOK EUR/SEK
Current level .8535
121.50 103.70 1.2325 7.6850 9.0220
Major trend Sideways Down Down Down Down Down
Major target
118.92 & 100 88.97 & 81.26
1.1015 & 1.0071 7.2175 & 7.1021 8.4430 & 8.2960
Trend change level .8286 / .9150 140.00 117.88 1.3239 7.9779 9.4253
82 FX TRADER MAGAZINE January - March 2012
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