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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 130.09, 128.31, 123.10
- Resistance:134.13, 135.43, 137.63
The Euro slumped to levels unseen since September 2013 against the Japanese Yen, with prices trying to clear a path for a test of the 130.00 figure. Near-term support is at 131.87, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 130.09.Alternatively, a turn above the 134.07-13 area marked by the 23.6% Fib and the October 16 low clears the way for a challenge of the 14.6% expansion at 135.43.
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 short 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
