EUR/JPY Technical Analysis – Candle Setup Hints at Gains
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- EUR/JPY Technical Strategy: Flat
- Support: 137.45 (channel floor), 136.22 (Feb 4 low)
- Resistance: 138.55 (14.6% Fib ret.), 139.10 (23.6% Fib ret.)
The Euro may be readying to turn higher against the Japanese Yen after prices put in a Bullish Engulfing candlestick pattern. Positive RSI divergence bolsters the case for the upside scenario. Initial resistance is at 138.55, the 14.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 23.6% level at 139.10. Falling channel floor support comes in at 137.45. A turn below that clears a path to test the February 4 low at 136.22
While tempting, we will tactically opt not to pursue a long position. The ECB stands out among the major central banks as moving further to the dovish side of the monetary policy spectrum, putting the Euro at an inherent disadvantage.
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.