EURJPY Turns Bullish After Double Bottom Formation
XM Group | Sep 22, 2014 03:41AM ET
The new trading week began calmly as there were no key data releases during the Asian session. Later in the day markets will focus on European Central Bank President Mario Draghi speaking before the European Parliament’s economic and monetary committee in Brussels.
The eur gained 0.2% versus the dollar to trade at 1.2856, after bouncing from a 14-month low of 1.2824 early in the session.
Sterling also rose, up 0.4% to 1.6346 but well off Friday’s highs of 1.6523 after it was boosted following Scotland’s vote to reject independence.
The dollar edged lower against the yen to trade at 108.85, moving away from a 6-year high of 109.44 hit on Friday.
Later in the US session today, focus will be on US existing home sales data, which are forecast to show an increase for a fifth straight month in August. This would be positive for the greenback. On Tuesday a series of Purchasing Managers Index (PMI) reports will be released from China and Europe.
EUR/JPY turns bullish after double bottom formation
A double bottom daily chart pattern was formed, resulting in a bullish turn for EUR/JPY after breaking above 138.00. The pair is currently resting on the 200-day moving average , which is also were the 50% Fibonacci retracement level lies of the 143.77 – 135.71 downleg.
The tenkan-sen and kijun-sen lines are positively aligned and RSI is bullish, there by supporting further upside potential.
There is scope to target the 78.6% Fibonacci at 142.02 in the event of a definitive break above the 61.8% level at 140.68.
Support lies at 138.79 and 138.00.
The market structure remains bullish above the 200-day moving average.
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