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EUR/JPY Technical Analysis: Recovery Stalls Above 137.00

EUR/JPY Technical Analysis: Recovery Stalls Above 137.00

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/JPY Technical Strategy: Flat
  • Support: 136.89, 135.43, 134.07
  • Resistance:138.25, 140.45, 142.23

The Euro stalled after reclaiming a foothold above the 137.00 figure against the Japanese Yen, snapping three days of consecutive gains. Near-term resistance is at 138.25, the 23.6% Fibonacci retracement, with a break above that on a daily closing basisexposing the 38.2% level at 140.45. Alternatively, a turn below the 14.6% retracement at 136.89 clears the way for a challenge of the 14.6% Fib expansion at 135.43.

Entering long looks compelling from a purely technical perspective but we will tactically opt against the trade. The upcoming ECB monetary policy announcement carries dramatic volatility risk that may derail positioning and we are leery of committing to a directional bias until it passes. As such, we will remain flat.

NOTE: FXCM Inc, Parent Company of DailyFX, will raise margin requirements given volatility risk

Daily Chart - Created Using FXCM Marketscope

--- 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.

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