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- EUR/JPY Technical Strategy: Flat
- Support: 140.40 (rising trend line)
- Resistance: 141.75 (38.2% Fib exp.), 142.81 (falling trend line)
The Euro may be on the verge of a reversal higher against the Japanese Yen after prices put in a bullish Piercing Line candlestick pattern above a rising trend line set from February. Near-term resistance is at 141.75, the 38.2% Fibonacci expansion, with a break above that targeting a downward-sloping barrier at 142.81. Trend line support is now at 140.40.
While risk/reward considerations allow for a long position at current levels, we will tactically opt to stand aside. Prices continue to show a significant correlation with the S&P 500 and the benchmark equity index looks vulnerable to deeper losses, warning that EURJPY may be pulled down amid broader risk aversion. With that in mind, we will stand aside.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com