Forex: EUR/JPY Technical Analysis – A Top Forming Below 141.00?
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- EUR/JPY Technical Strategy: Flat
- Support: 139.83-93 (38.2% Fib ret., Feb 11 close), 139.31 (horizontal pivot)
- Resistance: 140.73-95 (Jan 13 close, 50% Fib ret.), 142.07 (61.8% Fib ret.)
Prices are still consolidating above support in the 139.83-93 area, markedby the 38.2%Fibonacci retracementand the February 11 close. Negative RSI divergence warns of ebbing bullish momentum and hints a reversal lower may be ahead. A break downward initially targets a horizontal pivot at 139.31 and the 23.6% level at 138.45. Alternatively, pushing above resistance in the 140.73-95 region (January 13 close, 50% Fib) exposes the 61.8% level at 142.07.
RSI divergence alone is not an actionable signal and we will opt to wait for a clear-cut directional break past the established range boundaries to yield a trade-able setup. In the meantime, we will remain on the sidelines.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.