EUR/JPY Technical Analysis – Opting Against Long Position

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Talking Points:

  • EUR/JPY Technical Strategy: Flat
  • Support: 140.50 (rising trend line)
  • Resistance: 141.75 (38.2% Fib exp.), 142.73 (falling trend line)

The Euro may be readying to turn higher against the Japanese Yen after prices produced a bullish Piercing Line candlestick pattern above trend line support from mid-February. A daily close above initial resistance at 141.75, the 38.2% Fibonacci expansion, exposes a downward-sloping trend line resistance at 142.73. Trend line support is now at 140.50.

While risk/reward considerations allow for a long position at current levels, we will tactically opt to stand aside. Prices continue to show a strong correlation with the S&P 500 (on rolling 20-day studies). The benchmark equity index has corrected higher over the past two days but the bounce appears corrective, warning that renewed weakness may pull EUR/JPY lower amid broader risk aversion.

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dailyclassics_eur-jpy_body_Picture_12.png, EUR/JPY Technical Analysis – Opting Against Long Position

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


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