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Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 131.48, 129.71, 126.84
- Resistance:134.77, 137.64, 139.95
The Euro is stalling against the Japanese Yen after putting in a bullish Morning Star candlestick pattern but a bounce may yet materialize. Positive RSI divergence reinforces the case for an advance. A daily close above the 134.13-77 area marked by the October 16 low and the 23.6% Fibonacci retracement exposes the 38.2% level at 137.64. Alternatively, a reversal below the 14.6% Fib expansion at 131.48 opens the door for a test of the 23.6% threshold at 129.71.
Positioning is inconclusive at this point, with prices offering no upside follow-through but likewise falling short of negating bullish reversal cues outright. We will continue to remain on the sidelines for the time being, waiting for a compelling opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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