USD/JPY: Is This A Valid Breakout?
USD/JPY Upside Paused
The price is trading in the red right now, it was rejected by an important static resistance. Remains to see what will really happen in the upcoming period because the USDX stays lower and the Nikkei stock index could retreat a little to retest the 20058 major broken resistance.
The Nikkei is somehow expected to climb much higher in the upcoming period, but we cannot exclude a minor retreat after the impressive rally. JP225 rallied and extended the upside momentum, but has found temporary resistance at the 20308 level, below the 20320 swing high.
The USD/JPY is trading in the red even if the United States data have come in mixed, seems like that the USD bulls are disappointed because the USDX is trading in the red as well. The greenback has received support, only from the Building Permits, which have increased from 1.23M to 1.30M, beating the 1.22M estimate and from the Import Prices, which have surged by 0.6%, exceeding the 0.4% estimate. The Housing Starts were reported at 1.18M, higher versus the 1.17M estimate.
Price has found temporary resistance at the 38.2% retracement level and now is pressuring the third warning line (WL3) of the descending pitchfork. I’ve said in the yesterday’s report that the pair should breakout above the WL3 if will touch it. I’ve also said that could find temporary resistance at the 38.2% retracement level. Remains to see how will react tomorrow after the FOMC, another disappointment will send the pair tumbling.
USD/JPY failed to reach the 112.00 psychological level and the median line (ml) of the minor blue ascending pitchfork, signaling a minor overbought.
EUR/USD Head And Shoulders?
EUR/USD is still trading in the green on the daily chart, but remains to see for how long. Today has failed to reach the confluence area formed UML with the upper median line (uml) of the minor descending pitchfork. A retest of the upper median line (uml) followed by a minor decrease will signal a drop toward the median line (ML) of the black ascending pitchfork. Unfortunately, the price will be driven by the fundamental factors tomorrow, so you should be careful.
A valid breakout above the 1.2041 horizontal obstacle will confirm a further increase in the upcoming weeks.
EUR/GBP Selling Opportunity?
The EUR/GBP has rebounded since yesterday, but failed to reach the confluence area formed at the intersection between the ML with the lower median line (lml) of the minor ascending pitchfork and also with the wl3. Technically, it could still resume the corrective phase, the major downside target will be at the lower median line (LML).