Talking Points: EUR/JPY Technical Strategy: Flat Support: 136.22 ( Feb 4 low) Resistance: 137.88-138.45 (channel bottom, 23.6% Fib ret.), 139.83 (38.2% Fib ret.) The Euro may be setting up for a rebound against the Japanese Yen after prices produced a bullish Piercing Line candlestick pattern. A daily close above resistance in the 137.88-138.45 area, marked by the underside of a broken falling channel and the 23.6% Fibonacci retracement, exposes the 38.2% level at 139.83. Near-term support remains at 136.22, the February 4 low. Risk/reward considerations argue against entering long at current levels as prices hover just below resistance. Furthermore, fundamental event risk heats up in the hours ahead with the ECB policy announcement , with the outcome threatening to substantially disrupt positioning. Indeed, the case for a dovish outcome appears compelling . On balance, we will stand aside for now.
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