EUR/JPY Technical Analysis: Trend Line Caps Recovery

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Talking Points:

• EUR/JPY Technical Strategy: Flat
• Support: 128.58, 127.63, 126.08
• Resistance:129.12, 130.13, 131.38

The Euro stalled against the Japanese Yen after prices hit resistance marked by a falling trend line capping gains since mid-February. A daily close above this barrier – now at 129.12 – exposes the 38.2% Fibonacci retracement at 130.13. Alternatively, turn below the 23.6% level at 128.58 clears the way for a test of the 14.6% Fib at 127.63.

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 short side is premature. We will remain flat for now, waiting for an actionable opportunity to present itself.

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Daily Chart - Created Using FXCM Marketscope

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