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The Euro recoiled upward into a familiar range, erasing what at first appeared like a breakout against the Japanese Yen two days ago. Prices are now challenging the 38.2% Fibonacci expansion at 140.71, with a break above that exposing the 50% level at 141.30. Alternatively, a turn back below the 23.6% Fib at 139.97 opens the door for another test of horizontal shelf support at 139.24.
Prices are too close to relevant resistance to justify a long position on risk/reward grounds. On the other hand, a short trade assuming resistance will hold is premature absent a defined reversal signal. We will continue to stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com