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Technical Update - EURUSD and USDJPY: Reversal Patterns formed – Will they play out?

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

EURUSD reached the resistance around 1.1145, as mentioned in the latest EURUSD Technical Update, and formed a rising wedge-like pattern in the process.
Yesterday, EURUSD formed a bearish engulfing-like pattern, which is an indication of a top and reversal, at least short-term. A correction is likely.

A test of the lower rising trendline and the 0.382 retracement at 1.1062 is quite likely, but if EURUSD breaks below the lower rising trendline, a correction down to the 0.618 retracement at 1.0993 is very possible.

It is likely to be just a correction as RSI is still showing positive sentiment with no divergence.
The bullish trend is intact until EURUSD closes below 1.0945.

The medium-term bullish trend is also intact, as highlighted in the latest Technical Update on EURUSD, with potential up to at least 1.1275. Technical analysis eurusd breaking key resistance big upside potential
eurusd d 2308
Source all charts: Saxo Group
eurusd w 2308

USDJPY touched the 0.6518 retracement at 144.62 and has formed a doji morning bottom and reversal-like pattern (circled, not textbook perfect but nevertheless) indicating a rebound.

Despite RSI not showing divergence, we could still see a bounce up to the resistance at around 149.40.

Indications of this scenario playing out include RSI closing back above the 40 threshold.

A break below the low of the doji candle will demolish the reversal pattern and likely push USDJPY lower to 143.30, possibly even below 142.50

usdjpy d 2308

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