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- USD/JPY Technical Strategy: Flat
- Support: 102.33 (38.2% Fib exp.), 102. 62 (horizontal pivot)
- Resistance: 101.57-78 (channel floor, 50% Fib exp.), 101.22 (61.8% Fib exp.)
The US Dollar registered its biggest daily decline in eight months against the Japanese Yen, with prices sinking to test channel support set from early February (101.57). This barrier is reinforced by the 50% Fibonacci expansion at 101.78. A break downward initially exposes the 61.8% level at 101.22. Alternatively, a bounce above the 38.2% Fib at 102.33 will face a horizontal pivot at 102.62.
Risk/reward considerations argue against entering short with prices trading in close proximity to relevant support. On the other hand, taking up the long side looks premature absent a defined bullish reversal signal. With that in mind, we will remain flat for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com