EUR/JPY Technical Analysis – Opting to Pass on Short Setup
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- EUR/JPY Technical Strategy: Flat
- Support: 140.00 (50% Fib ret.), 139.11 (61.8% Fib ret.)
- Resistance: 140.89 (38.2% Fib ret.), 141.29 (rising trend line)
The Euro has descended to a two-month low against the Japanese Yen, probing below support marked by the 140.00 figure. This psychological barrier is bolstered by the 50% Fibonacci retracement. Confirmation of a breakout on a daily closing basis clears the way for a test of the 61.8% level at 139.11. Alternatively, a reversal above the 38.2% Fib at 140.89 clears the way for a retest a recently broken rising trend line set from mid-February, now at 141.29.
The pending breakdown looks promising but we will opt not to enter short as a double dose of relevant event risk looms ahead. Eurozone GDP data is set to show growth accelerated in the first quarter while US CPI figures will be important for risk appetite and sentiment-sensitive Yen pairs. We already have exposure via GBPJPY on this front and will opt to stand aside here.
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.