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- EUR/JPY Technical Strategy: Flat
- Support: 141.11 (23.6% Fib exp.), 139.24 (range bottom)
- Resistance: 144.14 (38.2% Fib exp.), 145.68 (Dec 27 high), 146.59 (50% Fib exp.)
The Euro shot higher against the Japanese Yen, taking out the 23.6% Fibonacci expansion at 141.11 and exposing the 38.2% level at 144.14. A further break above that barrier aims for the December 27 high at 145.68 and the 50% Fib at 146.59. Alternatively, a reversal back below 141.11 targets range bottom support at 139.24.
From a risk/reward perspective, maintaining a 1:1 ratio requires a long entry price no higher than 142.62 given a target at 144.14 and a stop-loss triggered on a close below 141.11. We will opt not to pursue a long position however. We suspected the Euro would rally after the ECB disappointed investors’ bets on an expansion of monetary stimulus but we don’t expect the rally to have meaningful follow-through.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com