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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 141.19 (channel top), 140.89 (38.2% Fib ret.)
- Resistance: 142.00 (23.6% Fib ret.), 142.96 (trend line)
The Euro fell against the Japanese Yen as expected after showing a Shooting Star candlestick pattern below falling trend line resistance set from December. The pair now rests atop minor channel top resistance-turned-support at 141.19, with a turn below this barrier targeting the 38.2% Fibonacci retracement at 140.89. The first layer of resistance is at 142.00, the 23.6% level, followed by the trend line (now at 142.96).
Prices are too close to relevant support to justify a long position from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal argues against taking up the long side. 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