Recent bullish divergence will drive EUR/JPY back to 125.50 before resuming its downward trend, according to JC Parets, Founder of All Star Charts.
Looking at a daily chart of EUR/JPY, Parets points out that the move downwards has been halted at the 61.8% Fibonacci retracement of the 2016 to 2018 rally. He thinks a bullish divergence between price and the 14-day RSI suggests EUR/JPY should move back towards the next major resistance at around 125.63 over the days and weeks ahead before heading lower once again (see Chart 1).
Elsewhere, Parets says the Australian Dollar is beginning to find traction relative to the US Dollar, citing a massive bullish momentum divergence which he believes is hard to ignore (see Chart 2). This divergence occurred at the same time as AUD/USD tested its long-term support near 0.68 and is similar to other long-term inflection points. As such, Parets thinks that AUD/USD will remain bullish as long as it remains above 0.68.
Read the full report, including an analysis of the following:
US Stocks (Russell 1000 Growth)
Small- and Micro-Caps
Global Stock Market Breadth
Cadence Design Systems (CDNS)
TSX Capped Information Technology
See All Star Charts website.