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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 135.80, 135.16, 134.58
- Resistance: 136.84, 137.67, 138.51
The Euro moved higher against the Japanese Yen as expected after putting in a bullish Piercing Line candlestick pattern. Near-term resistance is in the 136.51-84 area marked by a falling channel top and the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 137.67. Alternatively, a turn below the 23.6% Fib at 135.80 clears the way for a test of the 14.6% Fib at 135.16.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com