EUR/JPY Technical Analysis: Resistance Now Above 137.00

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Talking Points:

• EUR/JPY Technical Strategy: Flat
• Support: 135.81, 134.92, 133.48
• Resistance:137.26, 138.43, 139.60

The Euro continues to push upward against the Japanese Yen but negative RSI divergence warns of ebbing upside momentum. Near-term resistance is at 137.26, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 138.43. Alternatively, turn below the 23.6% Fib at 135.81 opens the door for a challenge of the 14.6% expansion at 134.92.

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