EUR/JPY Technical Analysis – Passing on Long Trade Setup
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- EUR/JPY Technical Strategy: Flat
- Support: 137.49 (channel floor), 136.22 (Feb 4 low)
- Resistance: 138.55 (14.6% Fib ret.), 139.10 (23.6% Fib ret.)
Euro technical positioning hints the single currency may be preparing to rebound against the Japanese Yen as prices complete a Bullish Engulfing candlestick pattern. Positive RSI divergence further supports the case for recovery. Resistance begins at 138.55, the 14.6% Fibonacci retracement. A daily close above this barrier targets the 23.6% level at 139.10. Falling channel floor support is now at 137.49. A reversal beneath that opens the door for a challenge of the February 4 low at 136.22.
We are tactically opting not to pursue a long position. While the technical setup is compelling, the Euro remains hobbled by the most dovish central bank among the majors, putting it at a distinct disadvantage. With that in mind, we will look to any bounce that materializes as a selling opportunity.
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.