EUR/JPY Technical Analysis: Waiting for Upside Follow-Through
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- EUR/JPY Technical Strategy: Flat
- Support: 131.48, 129.71, 126.84
- Resistance:134.77, 137.64, 139.95
The Euro may be readying to move higher against the Japanese Yen after putting in a bullish Morning Star candlestick pattern. Positive RSI divergence reinforces the case for an advance. Near-term resistance is in the 134.13-77 area, marked by the October 16 low and the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 137.64. Alternatively, a turn below the 14.6% Fib expansion at 131.48 clears the way for a challenge of the 23.6% threshold at 129.71.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish 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