EUR/JPY Technical Analysis: Possible Double Bottom Forming
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- EUR/JPY Technical Strategy: Flat
- Support: 136.22-27, 135.77, 135.18
- Resistance:137.62, 138.80, 139.75
The Euro is attempting to bounce against the Japanese Yen as expected after showing positive RSI divergence on a test of February’s swing bottom. Near-term resistance is at 137.62, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the intersection of the 38.2% level and a falling channel top at 138.80. Alternatively, a reversal below in the 136.22-27 area, marked by the February 4 low and the 23.6% Fib expansion, clears the way for a test of the channel floor at 135.77.
We are tactically opting not to pursue a long position, choosing not be long the Euro considering the ECB is shaping up to be the most dovish of the major central banks over the coming months. Rather, we will continue to monitor the upswing for opportunities to enter short.
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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.