EUR/JPY Technical Analysis: Eyeing Resistance Above 131.00
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- EUR/JPY Technical Strategy: Flat
- Support: 130.13, 128.58, 127.63
- Resistance:131.38, 132.63, 134.18
The Euro seems to have overturned the down trend established against the Japanese Yen since mid-February. Near-term resistance is at 130.31, the 38.2% Fibonacci retracement, with a break above that on a daily closing basis exposing the 50% level at 131.38. Alternatively, turn below trend line resistance-turned-support at 128.98 opens the door for a challenge of the 23.6% Fib at 128.58.
While entering long seems compelling from a purely technical perspective, we will tactically opt to stand aside. A significant inverse correlation between US bond yields and the Yen hints the full spectrum of JPY-based pairs are vulnerable to outsized volatility following the upcoming FOMC policy announcement. As such, we will stand aside for now and reassess positioning after event risk passes.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.