EUR/JPY Technical Analysis: Former Resistance Now Support
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- EUR/JPY Technical Strategy: Flat
- Support: 135.33, 134.30, 133.46
- Resistance: 135.97, 136.83, 137.67
The Euro pulled back having advanced as expected against the Japanese Yen after prices put in a bullish Piercing Line candlestick pattern. A daily close below the intersection of rising channel resistance-turned-support and the 23.6% Fibonacci expansion at 135.33 exposes the 38.2% level at 134.30. Alternatively, a reversal above the 14.6% expansion at 135.97 opens the door for a challenge of the 38.2% Fib retracement at 136.83.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long 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