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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 135.65, 134.68, 132.80
- Resistance:137.24, 138.52, 139.80
The Euro may be preparing to make a run toward monthly highs against the Japanese Yen after prices narrowly cleared chart resistance. A daily close above the 136.95-137.24 area (May 18 high, 38.2% Fibonacci expansion) exposes the 50% level at 138.52. Alternatively, a reversal below the 23.6% Fib at 135.65 clears the way for a test of the 14.6% expansion at 134.68.
Prices overcame resistance by a mere 5 pips. In the context of ATR at 124 pips, this seems exceptionally narrow, warning against betting on upside follow-through. With that in mind, we will opt not to enter long and wait for a more convincing setup to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
