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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 132.48, 130.71, 127.84
- Resistance:135.02, 137.64, 139.95
The Euro continues to consolidate after attempting to recover as expected against the Japanese Yen having shown a bullish Morning Star candlestick pattern. A daily close above the 134.77-135.02 area marked by the October 14 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 138.48 opens the door for a test of the 23.6% threshold at 130.71.
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
