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- EUR/JPY Technical Strategy: Flat
- Support: 139.83-93 (38.2% Fib ret., Feb 11 close), 139.31 (horizontal pivot)
- Resistance: 140.73-95 (Jan 13 close, 50% Fib ret.), 142.07 (61.8% Fib ret.)
The Euro may be preparing to turn lower against the Japanese Yen after prices produced a Harami candlestick pattern below resistance in the 140.73-95 area, marked by the January 13 close and the 50% Fibonacci retracement. Near-term support is in the 139.83-93 region, defined by the 38.2% Fib and the February 11 close. A break below that targets a horizontal pivot at 139.31, followed by the 23.6% retracement at 138.45. Alternatively, a reversal above resistance eyes the 61.8% level at 142.07.
Prices are too close to near-term support to justify a short position from a risk/reward perspective. Furthermore, a Harami pattern is relatively weak signal and it is prudent to wait for additional confirmation before trading on the idea that downside follow-through will materialize. We will remain on the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com