Things are tightening up in the EURJPY pair – quite literally in fact, as the pair is the midst of a symmetrical triangle. The pair had tried to break through minor support at 134.50, but was unable to break the ascending triangle in trading yesterday. Also, the pair touched the longer term down trend line. When will the pair break out? If the pair breaks out to the top side, it may encounter some resistance at 136.00. If the pair heads south, we may see it test strong support at 133.00.
Is that a pullback on the USDCAD?!? I don’t know exactly but it looks like there would be some serious selling pressures at 1.0900 as it has served as support previously. If 1.0900 price region remains intact and the pair heads downside again, its support could be found somewhere around at 1.0720 (this week’s low) and 1.0630 (this month’s low). Conversely, if the USD rally proves to be too strong, 1.1000 and 1.1100 are the next potential resistance levels.
A long, long time ago, the 94.00 handle served as a strong support level for the USDJPY. This level was breached a couple of months ago but the pair ended up climbing back above this psychologically significant support level. On its way back up, the pair hit the descending trend line drawn connecting the highs of the pair. The pair is currently sitting atop the 94.00 mark, which happens to be in line with the 61.8% Fibonacci retracement level. With the stochastic starting to pull out of the oversold region, the pair could rebound right until it makes contact with the descending trend line. A bit of bullish divergence is also seen in the daily chart as the oscillator showed lower lows but the price dipped to higher lows. There’s also the chance that the pair could break the support at 94.00 yet again and it could encounter a barrier around the previous low of 91.74 on its way down.
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