EUR/JPY Technical Analysis: May Top in the Crosshairs

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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 is taking aim at May’s high against the Japanese Yen following four consecutive days of gains. Near-term resistance is in the 136.95-137.24 area (May 18 high, 38.2% Fibonacci expansion), with a break above that on a daily closing basis exposing the 50% level at 138.52. Alternatively, a turn below the 23.6% Fib at 135.65 opens the door for a challenge of the 14.6% expansion at 134.68.

While entering long seems compelling from a purely technical perspective, we will tactically opt to stand aside. Greece-inspired volatility risk heats up in the days ahead and may derail technical positioning. Furthermore, our long-term outlook broadly favors Euro weakness. As such, we will wait for an opportunity to sell the single currency to arise.

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com