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- EUR/JPY Technical Strategy: Flat
- Support: 138.06 (23.6% Fib ret.), 136.68 (50% Fib ret.)
- Resistance: 140.29 (Feb 11 high)
The Euro rebounded as expected against the Japanese Yen after showing a bullish Piercing Line candlestick pattern. Our decision to pass on a long trade setup yesterday proved prudent: prices reversed lower, forming a Bearish Engulfing candle setup and hinting at further weakness ahead.
Near-term support is at 138.06, the 23.6% Fibonacci expansion, with a break below that targeting the 38.2% level at 136.68. Near-term resistance is at 140.29, the February 11 high. Prices are too close to support to make a short trade here palatable from a risk/reward perspective and we will stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com