EUR/JPY Technical Analysis: Short Position Parameters Set
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- EUR/JPY Technical Strategy: Flat
- Support: 136.11-22, 135.32, 134.91
- Resistance:137.26, 138.02, 138.42
The Euro declined against the Japanese Yen as expected after prices produced a Bearish Engulfing candlestick pattern. Near-term support is now in the 136.09-22 area, marked by the 23.6%Fibonacci expansion and the February 4 low, with a break below that on a daily closing basis exposing a falling channel floor at 1.3532. Alternatively, a reversal above rising trend line support-turned-resistance at 137.26 clears the way for a test of the August 1 high at 138.00.
The break of rising trend line support seems to confirm the case for down trend resumption but risk/reward parameters do not allow for entry at market. We will set an order to short the pair at 137.12 with an initial target of 136.22. If triggered, the trade will have a stop-loss to be activated on a daily close above 138.02.
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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.