EUR/JPY Technical Analysis: Uptrend Boundary Threatened
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- EUR/JPY Technical Strategy: Flat
- Support: 134.38, 132.80, 131.52
- Resistance:135.36, 136.95, 138.41
The Euro declined against the Japanese Yen as expected following the appearance of negative RSI divergence. Near-term support is at 134.38, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 132.80. Alternatively, turn above the 14.6% Fib at 137.26 opens the door for a challenge of the May 18 high at 136.95.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long 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