EUR/JPY Technical Analysis: Move Below 127.00 Seen Ahead

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Talking Points:

• EUR/JPY Technical Strategy: Short at 135.25
• Support: 126.86, 124.54, 121.67
• Resistance:133.13, 132.04, 133.81

The Euro is accelerating lower against the Japanese Yen having reversed as expected after producing a bearish Evening Star candlestick pattern. A daily close below the 50% Fibonacci expansion at 126.86 exposes the 61.8% level at 124.54. Alternatively, a turn above the 129.17-130.13 area (38.2% Fibonacci expansion, January 26 low) opens the door for a test of the 23.6% expansionat 132.04.

We sold EURJPY at 135.25 and subsequently booked profits on half of the position. The remainder of the position remains open to capture any further downward momentum. The stop-loss has been trailed to the breakeven level (135.25).

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com