Forex: USD/JPY Technical Analysis – Passing on Short Trade Setup
To receive Ilya's analysis directly via email, please SIGN UP HERE
- USD/JPY Technical Strategy: Flat
- Support: 101.03 (38.2% Fib exp.), 100.48 (50% Fib exp.)
- Resistance:101.71-88 (23.6% Fib exp., trend line),102.82 (Feb 21 high)
Prices took out support at 101.71 marked by a rising trend line set from early October and the 23.6% Fibonacci expansion, exposing the 38.2% level at 101.03. A further push below that targets the 50% level at 100.48. Alternatively, reversing back above 101.71 aims for the February 21 high at 102.82.
A short position targeting 101.03 with a stop-loss activated on a daily close above 101.71 requires an entry no lower than 101.37 to maintain a 1:1 risk/reward ratio. While that means that the pair is currently trading at acceptable levels to take the trade from that perspective, we will opt to stand aside. The move lower has been triggered by geopolitical event risk, which makes for a shaky landscape with high probability of seesaw price action and raises concerns about downside follow-through.
Daily Chart - Created Using FXCM Marketscope 2.0
--- 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.