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USD/JPY Technical Analysis: Bearish Reversal in Progress?

USD/JPY Technical Analysis: Bearish Reversal in Progress?

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Talking Points:

  • USD/JPY Technical Strategy: Flat
  • Support: 124.12, 123.41, 122.84
  • Resistance: 124.56, 125.27, 125.85

The US Dollar put in the largest decline in a month against Japanese Yen, with negative RSI divergence hinting a larger downturn may be ahead. Near-term support is at 124.12, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 123.41. Alternatively, a turn above the 14.6% Fib at 124.56 clears the way for a test of the August 12 high at 125.27.

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

Add these technical levels directly to your charts with our Support/Resistance Wizard app!

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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