EUR/JPY Technical Analysis: August Highs Back in Focus
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- EUR/JPY Technical Strategy: Flat
- Support: 138.36, 137.86, 137.05
- Resistance:139.17, 139.83, 140.48
The Euro continued to recover for a second consecutive day, with prices poised to challenge monthly highs. Near-term resistance is in the 138.85-139.17 area (August 12 high, 38.2% Fibonacci expansion), with a break above that on a daily closing basis exposing the 50% level at 139.83. Alternatively, a move below the 23.6% Fib expansion at 138.36 clears the way for a test of the 14.6% expansion at 137.86.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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