EUR/JPY Technical Analysis: Stalling Below 135.00 Figure

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Talking Points:

• EUR/JPY Technical Strategy: Flat
• Support: 134.38, 132.80, 131.52
• Resistance:135.36, 136.95, 138.41

The Euro is digesting losses below the 135.00 figure after turning downward as expected against the Japanese Yen. 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, push 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