EUR/JPY Technical Analysis: Euro Down Trend Resuming?

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Talking Points:

• EUR/JPY Technical Strategy: Flat
• Support: 135.96, 134.83, 133.91
• Resistance:136.66, 137.79, 139.11

The Euro may turn lower against the Japanese Yen after prices put in a bearish Evening Star candlestick pattern. Near-term support is at 135.96, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 134.83. Alternatively, a push above the 14.6% Fib at 136.66 opens the door for a challenge of the July 13 high at 137.79.

The available trading range is too narrow to justify entering a trade in line with our long-term Euro outlook from a risk/reward perspective. With that in mind, we will remain flat for now, waiting for price action to offer a more compelling opportunity down the road.

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