Talking Points:
- EUR/JPY Technical Strategy: Flat
- Support: 137.62, 136.89, 136.22
- Resistance:138.57-80, 139.75, 140.70
The euro advanced against the Japanese yen as expected after positive RSI divergence was spotted on a test of February’s swing bottom. A daily close above the 138.57-80 area marked by a falling channel top and the 38.2% Fibonacci retracement exposes the 50% level at 139.75. Alternatively, a turn below the 23.6% Fib at 137.62 clears the way for a test of the 14.6% expansion at 136.89.
The ECB looks to be the most dovish of the leading central banks, putting the euro at a disadvantage against its major counterparts. With that in mind, we will opt not to pursue a long position and wait for the bounce to produce a selling opportunity.