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- USD/JPY Technical Strategy: Flat
- Support: 102.11 (23.6% Fib exp.), 101.64 (channel floor)
- Resistance: 102.60 (38.2% Fib exp.), 103.00 (50% Fib exp.)
The US Dollar is in consolidation mode against the Japanese Yen having advanced as expected after forming a bullish Morning Star candlestick pattern. Buyers are testing support at 102.11, the 23.6% Fibonacci expansion, with a break below that exposing the bottom of a channel set from early February (now at 101.64). Alternatively, a move above resistance marked by the 38.2% level at 102.60 targets the 50% Fib at 103.00.
Risk/reward considerations argue against taking a short position with prices trading so close to relevant support. On the other hand, a clearly defined signal calling for a long trade is absent. We will remain flat for the time being, waiting for a more attractive setup to present itself.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com