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- EUR/JPY Technical Strategy: Flat
- Support: 137.65-83, 136.70-93, 136.21
- Resistance: 138.20, 138.75, 139.27
The Euro turned lower anew against the Japanese Yen, dropping below support guiding the upswing from the mid-June swing bottom. Sellers are testing support in the 137.65-83 area, marked by the 23.6% Fibonacci expansion and the June 12 low. A break below that on a daily closing basis exposes the 38.2% level at 136.93. This barrier is reinforced by a falling channel bottom at 136.70. Alternatively, a turn back above the trend line – now recast as resistance at 138.20 – opens the door for a move to the July 9 high at 138.75.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal argues against taking up the long side. 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