The good macro data from the euro area released today fuelled
the euro bulls and the EUR/JPY pair skyrocketed and marked its highest level
for more than a year at 125.80.
After the first lap of the French elections the pair made sharp U turn and
since then we are witnessing strong rally, which is clearly seen on the daily
graphic. Technical indicators are showing extreme overbought conditions, but
yet are aiming higher, so the pair is poised to extend the rally before
correcting.
The short term outlook also remains bullish. The four-hour time frame is
showing that the price is strongly moving above the100-day SMA and today has
crossed to above and the 20-day SMA. RSI and stochastic had retreated slightly but
yet are located within extreme overbought area.
The pair is facing strong resistance at 126.25 – April’s 2016 high and in case
bulls succeed to conquer it, next target is seen at 126.90.
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