By Greg Holden – The EUR has been under pressure lately from the sovereign debt concerns in Greece. The rumor about a possible bailout of Greece has helped the EUR gain strength, but some are doubtful of this recent movement and think that a bailout will result in a printing of more money in the Euro-Zone which, obviously, will be a move that intentionally weakens the 16-nation currency.
Tech Analysis
– The chart below is the 4-hour chart of the EUR/JPY pair by ForexYard.
– The technical indicators used are the Relative Strength Index (RSI) and the Stochastic (slow).
– Point 1: As can be seen on the chart, there is a clear bearish channel on this pair and the price has reached the upper border of this trend, signaling a significant resistance level.
– A doji candlestick has also recently formed at this resistance line, suggesting a downward correction should take place in the immediate future.
– Point 2: The RSI is showing that the pair recently entered the over-bought territory, and the indicator has just turned into a bearish posture, highlighting an increased level of downward pressure.
– Point 3: The Stochastic (slow) is approaching the 80 level which suggests that it may cross over into this over-bought territory and create a bearish cross. If that does indeed take place, then downward movement may be expected in the medium-term.
EUR/JPY – 4-Hour Chart
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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