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- EUR/JPY Technical Strategy: Flat
- Support: 138.95 (76.4% Fib exp.), 138.34 (100% Fib exp.)
- Resistance: 139.33 (61.8% Fib exp.), 139.64 (50% Fib exp.)
The Euro continues to sink against the Japanese Yen, with prices poised to issue the lowest close in nearly four months. A daily close below support at 138.95, the 76.4% Fibonacci expansion, clear the way for a test of the 100% level at 138.34. The first layer of resistance is at 139.33, the 61.8% Fib. A turn back above that opens the door for a challenge of the 50% expansion at 139.64.
Assuming the break materializes, the available trading range of 61 pips will be too narrow to justify entering short from a risk/reward perspective given an ATR reading of 85 pips (and given a strategy using a stop-loss triggered on a daily closing basis, as ours does). We will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com