Talking Points:- EUR/JPY Technical Strategy: Flat
- Euro Rallies Most in Three Weeks vs. Japanese Yen, Invalidates Breakdown
- Gains Seen as Corrective, Waiting for Another Selling Opportunity Ahead
The euro corrected sharply higher against the Japanese yen, with prices now eyeing resistance above the 134.00 figure. The pair put in the largest daily gain in three weeks, invalidating the bearish breakout noted earlier in the week.
From here, a daily close above the 38.2% Fibonacci retracement at 134.81 opens the door for a challenge of the 50% level at 135.61. Alternatively, a turn back below resistance-turned-support at 133.82, the 23.6% Fib, clears the way for a test of the 14.6% retracement at 133.22.
Our short EUR/JPY position from 133.11 has been stopped out. The overall bias continues to look bearish, however, painting near-term gains as corrective. With that in mind, we will monitor price action for a new selling opportunity ahead.
