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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 137.17, 136.11-22, 135.37
- Resistance:138.02, 138.49, 138.80
The Euro moved lower as expected against the Japanese Yen after prices put in a Bearish Engulfing candlestick pattern. A daily close below rising trend line support at 137.17 exposes the 136.11-22 area, marked by the 23.6%Fibonacci expansion and the February 4 low. Alternatively, a turn above the August 1 high at 138.00 opens the door for a challenge of falling channel top resistance at 138.49.
Risk/reward considerations argue against entering short with prices 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
