EUR/JPY Technical Analysis: Euro Rebound Effort Stalling
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- EUR/JPY Technical Strategy: Flat
- Support: 132.48, 130.71, 127.84
- Resistance:135.02, 137.64, 139.95
The Euro is stalling after attempting to rise against the Japanese Yen as expected following the appearance of a bullish Morning Star candlestick pattern. Near-term resistance is in the 134.77-135.02 area, marked by the October 14 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 138.48 clears the way for a challenge of the 23.6% threshold at 130.71.
An actionable trade setup is absent at this point. On one hand, prices are too close to support to enter short from a risk/reward perspective. On the other, our fundamental outlook calls for broad-based Euro weakness and we prefer to treat any oncoming gains as an opportunity to short rather than a stand-alone long-trade setup. With that in mind, we remain flat.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com