Forex: USD/JPY Technical Analysis – Support Held Below 101.00
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- USD/JPY Technical Strategy: Flat
- Support: 100.98 (50% Fib ret.), 99.93 (61.8% Fib ret.)
- Resistance: 101.76-102.02 (channel bottom, 38.2% Fib ret.), 103.32 (23.6% Fib ret.)
Prices remain wedged between support at 100.98, the 50% Fibonacci retracement, and the underside of a falling channel set from mid-December (now at 101.76). Resistance is reinforced by the 38.2% retracement at 102.02. A daily close above this barrier initially exposes the 23.6% Fib at 103.32. Alternatively, reversing below support targets the 61.8% level at 99.93.
Tight congestion between near-term up- and downside technical barriers argues against taking a trade at current levels on risk/reward grounds. Furthermore, the pair’s strong sensitivity to risk sentiment trends warns against taking directional bets before the upcoming US Employment data. We will opt to play it safe and not to take a directional bet for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com