Thursday, July 14, 2011

EUR/JPY Double Bottom Triggered - 14 July 2011

The EUR/JPY has risen quite strongly, breaking above the key 111.90 level confirming the double bottom reversal pattern. There has been a lack of follow through, however, and now the exchange rate has fallen to about 112.00. 

It is possible there will be a rally from here, however, given the support zone at the former double top resistance highs just underneath. 113.50 looms large as a resistance level given the S1 monthly pivot nearby. 

After that is possible the pattern price objective at 114.40 could be met in time, whilst 114.80 would fill Monday's gap. Once the up-trend exhausts itself, however, the larger bearish trend will probably resume its descent.

Analysis prepared by:
Joaquin Monfort
Forex4you analyst