EUR/JPY Technical Analysis: Candle Setup Hints at Downturn
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- EUR/JPY Technical Strategy: Flat
- Support: 131.82, 129.69, 126.08
- Resistance:135.13, 137.93, 140.73
The Euro may be readying to turn lower against the Japanese Yen once again after the formation of a Bearish Engulfing candlestick pattern. Near-term support is at 131.82, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 23.6% level at 129.69. Alternatively, turn above the 38.2% Fib retracement at 135.13 opens the door for a challenge of the 50% threshold at 137.93.
A short trade is a tempting proposition on a purely technical basis but we are apprehensive about committing to a directional bias on sentiment-sensitive JPY-based pairs before the week’s high-profile scheduled event risk passes. 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.