EUR/JPY Technical Analysis - Prices are testing resistance at 132.38, the July 22 high, a barrier reinforced by the 23.6% Fibonacci expansion at 132.51. A break above the latter on a daily closing basis would invalidate the Bearish Engulfing candlestick pattern identified earlier and expose the 38.2% level at 133.59. Trend line support is now at 131.25, with a reversal below that eyeing the 23.6% Fib retracement at 130.62. Negative RSI divergence argues in favor of a downside scenario.

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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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