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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 131.82, 129.69, 126.08
- Resistance:135.13, 137.93, 140.73
The Euro may be preparing to decline against the Japanese Yen after prices put in a Bearish Engulfing candlestick pattern. A daily close below the 14.6% Fibonacci expansionat 131.82 exposes the 23.6% level at 129.69. Alternatively, reversal above the 38.2% Fib retracement at 135.13 clears the way for a test of the 50% threshold at 137.93.
While entering short is a compelling proposition from a purely technical perspective, we will tactically opt to stand for now. Sentiment-linked Yen pairs may see positioning derailed by reactions to this week’s high-profile event risk. With that in mind, we will stay flat for the time being.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
