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- EUR/JPY Technical Strategy: Flat
- Support: 140.00-29 (50% Fib ret., trend line), 139.11 (61.8% Fib ret.)
- Resistance: 140.89 (38.2% Fib ret.), 142.00 (23.6% Fib ret.)
The Euro declined as expected against the Japanese Yen after the pair produced a Shooting Star candlestick pattern below a falling trend line set from late December. Sellers are testing support in the 140.00-29 area, marked by a rising trend line set from mid-February and the 50% Fibonacci retracement. A break below this barrier aims for the 61.8% level at 139.11. Alternatively, a turn above resistance at 140.89, the 38.2% Fib, eyes the 23.6% retracement at 142.00.
Risk/reward considerations argue against entering short with prices trading in close proximity to relevant support. On the other hand, taking up the long side looks premature absent a defined bullish reversal signal. With that in mind, we will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com