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Talking Points:

• EUR/JPY Technical Strategy: Flat

• Support: 134.13, 132.40, 130.20

• Resistance:135.96, 137.06, 138.17

The Euro stalled to digest losses after issuing the largest daily decline in nearly two years against the Japanese Yen. Near-term support is in the 134.13-60 area, marked by the October 16 low and the 76.4% Fibonacci expansion, with a break below that on a daily closing basisexposing the 100% level at 132.40. Alternatively, a turn above the 61.8% Fib at 135.96 clears the way for a challenge of the 50% expansion at 137.06.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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Daily Chart - Created Using FXCM Marketscope

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

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