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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 137.72, 137.02, 135.89
- Resistance:139.22, 141.04, 142.23
The Euro may be preparing to turn lower against the Japanese Yen after putting in a bearish Evening Star candlestick pattern. Near-term support is at 137.72, the 14.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 23.6% level at 137.02. Alternatively, a move above the 76.4% Fib retracement at 139.22 clears the way for a test of the June 4 high at 141.04.
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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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
