EUR/JPY Technical Analysis – Cautious Recovery Commences
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- EUR/JPY Technical Strategy: Flat
- Support: 137.65 (Jun 12 low), 137.41 (channel floor), 136.22 (Feb 4 low)
- Resistance: 138.55 (14.6% Fib ret.), 139.10 (23.6% Fib ret.)
Euro is edging higher against the Japanese Yen as expected after prices completed 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. Support is at 137.65, the June 12 low, followed by the falling channel floor at 137.41 and the February 4 low at 136.22.
We are tactically opting not to pursue a long position. 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 treat any further gains from here as an emerging 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.