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Talking Points:

• EUR/JPY Technical Strategy: Short at 135.25

• Support: 126.86, 124.54, 121.67

• Resistance:130.13, 132.04, 133.81

The Euro turned lower against the Japanese Yen as expected after putting in a bearish Evening Star candlestick pattern. Near-term support is at 126.86, the 50% Fibonacci expansion, with a break below that on a daily closing basis exposing the 61.8% level at 124.54. Alternatively, a reversal above the 129.17-130.13 area (38.2% Fibonacci expansion, January 26 low) clears the way for a challenge of the 23.6% expansionat 132.04.

We entered short EURJPY at 135.25 and subsequently booked profits on half of the position. The rest of the trade remains open to capture any further downside. The stop-loss has been adjusted to the breakeven level (135.25).

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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