EUR/JPY Technical Analysis: 3-Week Down Trend Broken?
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- EUR/JPY Technical Strategy: Flat
- Support: 137.35, 136.55, 135.75
- Resistance: 137.85, 138.65, 139.30
The Euro broke channel resistance guiding its down trend against the Japanese Yen, completing a bullish Piercing Line candlestick pattern. The setup hints at further gains ahead, with a daily close above the 23.6% Fibonacci expansion at 137.85 exposing the 38.2% level at 138.65. Alternatively, a reversal back below the intersection of the 14.6% Fib and the channel top at 137.35 opens the door for a challenge of the October 7 low at 136.55.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. With that in mind 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.