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Talking Points:

• EUR/JPY Technical Strategy: Flat

• Support:128.63, 128.00, 126.85

• Resistance:130.63, 131.79, 132.94

The Euro is digesting losses after turning sharply lower from resistance below 132.00 against the Japanese Yen. Near-term trend line resistance-turned-support is at 128.63, with a break below that on a daily closing basis exposing the 38.2% Fibonacci expansion at 128.00. Alternatively, turn above the 38.2% Fib retracement at 130.63 opens the door for a test of the 50% threshold at 131.79.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.

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Daily Chart - Created Using FXCM Marketscope

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

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