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Talking Points:
- EUR/JPY Technical Strategy: Short at 137.12
- Support: 136.09-22, 134.91, 133.96
- Resistance:138.02-13, 138.80, 139.75
The Euro launched aggressively higher against the Japanese Yen, producing the largest daily upswing in six months. A daily close above the intersection of a falling channel top and the August 1 high in the 138.02-13 area exposes the 38.2% Fibonacci retracement at 138.80. Alternatively, a move below support in the 136.09-22 zone marked by the February 4 low and the 23.6% Fib expansion opens the door for a challenge of 134.91, the meeting place of the channel floor and the 38.2% threshold.
We entered short EURJPY at 137.12, initially targeting 136.22 with a stop-loss to be activated on a daily close above 138.02. The trade narrowly survived today, leaving the channel top and the Bearish Engulfing candlestick pattern that triggered the position intact. With that in mind, we will remain in the trade for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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