EUR/JPY Technical Analysis: Euro Reversal in Progress?
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- EUR/JPY Technical Strategy: Flat
- Support: 147.76, 145.59, 143.79
- Resistance:149.11, 151.30, 153.07
The Euro is attempting to turn lower against the Japanese Yen as expected following the appearance of bearish Dark Cloud Cover candlestick pattern. Negative RSI divergence bolsters the case for a downside scenario. Near-term support is at 147.76, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 23.6% Fib retracement at 146.08. Alternatively, a turn above the 23.6% expansion at 149.11 clears the way for a test of the 38.2% threshold at 151.30.
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, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com