EUR/JPY Technical Analysis – Candle Pattern Hints at Bounce
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- EUR/JPY Technical Strategy: Flat
- Support: 140.38 (rising trend line)
- Resistance: 141.75 (38.2% Fib exp.), 142.82 (falling trend line)
The Euro may be readying an upward reversal against the Japanese Yen after prices produced a bullish Piercing Line candlestick pattern above rising trend line support from mid-February. A daily close above initial resistance at 141.75, the 38.2% Fibonacci expansion, exposes a downward-sloping trend line resistance at 142.82. Trend line support is now at 140.38.
The distance between near-term support and resistance is 63 pips while the 20-day ATR reading comes in at 105 pips.That makes for an available trading range that is too narrow trade with a strategy using a stop-loss activated on a daily closing basis (as is the case with our approach). We will remain on the flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com