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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 142.19, 140.65, 139.40
- Resistance: 144.46, 145.93, 147.12
The Euro may be vulnerable to a turn lower against the Japanese Yen as negative RSI divergence points to fading upside momentum. Near-term support is at 142.19, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 140.65. Alternatively, a reversal above the 23.6% Fib expansion at 144.46 clears the way for a test of the 38.2% threshold at 145.93.
Our short EURJPY position was stopped out yesterday on a daily close above 144.21. From here, RSI divergence alone is insufficient evidence of reversal to re-enter the trade. We will remain on the sidelines until something more compelling presents itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com