EUR/JPY Technical Analysis: Room for More Gains

Monday, 04 April 2011 19:53

After spending an entire year near its all time lows, the EUR/JPY seems to be planning a comeback. Here, we take a look at the long term charts and find signs of a new uptrend.

The weekly chart shows a spectacular rebound off the 107.00 base and a breach of the 115.45 line (S1). The bullish move is confirmed by the MACD, which recently came back in positive territory and is trending upwards.

Moreover, the classic squeeze and breakout Bollinger Bands pattern suggests the start of a new move to the upside.

With the nearest significant resistance level at 127.54, and not much in the way, the EUR/JPY could easily erase last year’s losses and move back above the 130.00 psychological level.

With the return of carry trades, we believe a buy and hold strategy could be very profitable in the long term.