EUR/JPY Technical Analysis: Aggressive Selloff Continues
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- EUR/JPY Technical Strategy: Flat
- Support: 136.53, 136.22-30, 135.60
- Resistance: 136.87, 137.43-65, 138.14
The Euro continues to accelerate downward against the Japanese Yen, dropping for a third consecutive day to hit the lowest level in over five months. A break below the 50% Fibonacci expansion at 136.87 has exposed a falling channel bottom set from early March, now at 136.53. A further push below that targets the 136.22-30 area, marked by the 61.8% Fib expansion and the February 4 low. Alternatively, a turn back above 136.87 opens the door for a challenge of the 137.43-65 area (38.2% Fib, June 12 low)
Risk/reward considerations argue against entering short with prices trading in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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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.