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EUR/JPY Technical Analysis: Looking to Confirm Reversal

EUR/JPY Technical Analysis: Looking to Confirm Reversal

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • EUR/JPY Technical Strategy: Flat
  • Support: 131.48, 129.71, 126.84
  • Resistance:134.77, 137.64, 139.95

The Euro may have set a bottom above the 130.00 figure against the Japanese Yen after putting in a bullish Morning Star candlestick pattern. Positive RSI divergence bolsters the case for an upside scenario. A daily close above the 134.13-77 area marked by the October 16 low and the 23.6% Fibonacci retracement exposes the 38.2% level at 137.64. Alternatively, a reversal below the 14.6% Fib expansion at 131.48 opens the door for a test of the 23.6% threshold at 129.71.

While the bullish chart setup is compelling, confirmation on a break through the bounds of the down trend carved out from early December highs remains absent. With that in mind, we will stand aside for now and wait for a more concrete opportunity before entering a trade.

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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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