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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 137.03, 136.22, 135.04
- Resistance: 138.12, 139.30, 140.03
The Euro is in consolidation mode after sliding to a one-month low below 137.00 against the Japanese Yen. A daily close below the intersection of channel top resistance-turned-support and the 50% Fibonacci expansion in the 137.03-17 area exposes the 61.8% level at 136.22. Alternatively, a reversal above the 38.2% Fib at 138.12 opens the door for a challenge of the 23.6% expansion at 139.30.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind we will remain flat for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com