EUR/JPY Technical Analysis – Euro Extends Cautious Rally
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- EUR/JPY Technical Strategy: Flat
- Support: 138.79, 138.36, 137.65-91
- Resistance: 139.49, 140.06, 140.63
The Euro is edging higher as expected against the Japanese Yen after putting in a Bullish Engulfing candlestick pattern. Near-term resistance is now at 139.49, the 38.2% Fibonacci retracement. A daily close above this barrier targets the 139.95-140.06 area, marked by the March 28 low, the 50% level and a falling channel top. Alternatively, a turn back below the 23.6% Fib at 138.79 opens the door for a test of the 14.6% retracement at 138.36.
The ECB looks to be the most dovish of the leading central banks, putting the Euro at a disadvantage against its major counterparts. With that in mind, we will opt not to pursue a long position and wait for the bounce to produce a selling opportunity.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com