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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 140.54 (rising trend line)
- Resistance: 141.75 (38.2% Fib exp.), 142.70 (falling trend line)
The Euro may be on the verge of a reversal higher against the Japanese Yen after prices put in a bullish Piercing Line candlestick pattern above a rising trend line set from February. Near-term resistance is at 141.75, the 38.2% Fibonacci expansion, with a break above that targeting a downward-sloping barrier at 142.70. Trend line support is now at 140.54.
The available trading range is too narrow to justify a trade from a risk/reward perspective. Furthermore, follow-through on the Piercing Line has been absent for some time now, raising questions about the setup’s potency. We will stand aside for now and monitor future developments for opportunities.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com