EUR/JPY Technical Analysis: Resistance at Old Fibonacci Support
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- EUR/JPY Technical Strategy: Long-term still in down-trend; short-term price action showing bullish tendencies.
- EUR/JPY has finally put in an extended bounce off of support; but is currently facing resistance at a familiar Fibonacci level.
- If you’re looking for trading ideas, check out our Trading Guides.
In our last article, we looked at EUR/JPY attempting to carve-out support on a projected trend-line that had previously shown resistance. And while support ultimately ended up digging-in a bit deeper than the trend-line had projected, EUR/JPY has jumped-higher by more than 140 pips after a short-term swing-low was set at 112.64, well above the confluent zone of support around the 112.00 handle that we’ve been watching as a near-term trend determinant in the pair.
At this point, price action in EUR/JPY is showing resistance at a prior level of support that also happens to be the 38.2% Fibonacci retracement of the ‘Brexit range’ in the pair. And while this is a bearish observation, it can carry bullish connotations very quickly should price action break above this resistance to highlight continuation potential. At 114.50 is the prior swing-high in the pair, and if price action can take out this level, then traders can get a bit of additional confirmation on the prospect of top-side continuation.
Should price action show the ability to throttle through this prior swing-high, traders can look for support in the vicinity of current resistance, around the 38.2% Fibonacci retracement of the ‘Brexit move’ in the pair, in the effort of trading top-side continuation in EUR/JPY.
Chart prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
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