Bullish hopes were dealt a blow on Thursday with the failure at the 21-DMA and bears taking comfort in the relatively bearish close which resulted in further losses back towards the Bollinger band base Friday. The 21-DMA failure has reconfirmed bearish pressure with focus having returned to the 2014 low. The Bollinger band base remains the key concern with follow through likely to be limited. Bulls continue to look for a close above the 21-DMA to hint at a move back to $1.6526-36.
Losses below the 21-DMA are starting to accelerate following last Tuesday’s close below, the first since mid-July. Initial resistance is now noted at Y107.60 with bulls needing a close above to ease bearish pressure whereas a close above Y108.75 is needed to confirm a break of the 21-DMa and shift focus back to the key Y110.09-68 region. Key concerns for bears come from O/S studies and the Bolli base but a close below Y106.81 adds weight to the bearish case targeting a deeper correction to Y104.28-68.
The recent failures to retake the 100-DMA have resulted in a move to fresh 2014 and 12 month lows with the EUR/JPY dipping below the Bollinger band base in Asian trading. The Bollinger band base appears to be limiting follow through with O/S studies also a concern but bulls now need a close above ¥136.59 to ease bearish pressure. Overall a close above the 100-DMA is needed to shift focus to the 200-DMA (¥139.39) and then the Sept highs. Bears now shift their focus to the ¥134.10 level and then ¥131.27.
SUP 4: ¥131.27 Monthly Low Nov 7 2013 EUR/GBP continues to oscillate around the 21-DMA with the £0.7895-00 region having become something of a sticking point. Initial support is now noted at £0.7850 with bears needing a close below to regain the upper hand and shift immediate focus back to the £0.7764-66 region. Bulls now need a close above £0.7900 to gain some breathing room and above the 55-DMA to shift initial focus to the 100-DMA.