EUR/USD has reached new lows and USD/JPY is reaching high sky levels. Is it time for a pullback in both pairs or can we see a continuation coming soon?
The team in TD weighs in:
Here is their view, courtesy of eFXnews:
EUR/USD retains a weak technical bias and short-term trend momentum is picking up again after the sideways movement in the EUR through much of November, notes TD.
“Having made new cycle lows this week and closing near the lows there is little sign of pressure on the single currency relenting. However, we can point to the lower, tightening range (descending wedge pattern) that has developed since October as one tangible sign that the move lower may be tiring,” TD add.
As such, TD thinks that if EUR/USD pushes higher through 1.2456, this would be a short-term bullish signal targeting a minor and temporary reprieve for the EUR and likely triggering a bounce to pullback resistance at 1.2610.
On the downside, TD argues that a clear break below 1.2253 would, on the other hand, trigger a bearish signal for the resumption of the underlying bear trend for 1.19/1.20.
In USD/JPY, TD notes that the short-term charts are of little value at this point.
“There is no sign of the move up turning, or even slowing. Bull trend momentum is firmly established across a range of short, medium and long-term timeframes which means thatcounter-trend corrections are liable to be shallow and short-lived” TD argues.
“Ultra-long term charts suggest 122.69 (quarterly) trend resistance and 124.14, the 2007 high as the next major points on the topside from here. The trend is your friend,” TD advises.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.
Share
