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- EUR/JPY Technical Strategy: Flat
- Support: 136.22, 135.68-89, 134.96
- Resistance:136.58, 137.13, 137.65
The Euro remains under pressure against the Japanese Yen, issuing the lowest daily close since November 2013. A break below the February 4 low at 136.22 initially exposes the 135.68-89 area, marked by a falling channel floor and the 38.2% Fibonacci expansion. Emerging signs of positive RSI divergence warn of ebbing downward momentum and hint a bounce may be ahead however. A reversal back above the 23.6% level at 136.58 opens the door for a test of the 14.6% Fib at 137.13.
Risk/reward considerations argue against entering short with prices trading in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com