USD/JPY Technical Analysis – 2-Month Channel Support Broken
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- USD/JPY Technical Strategy: Flat
- Support: 101.22 (61.8% Fib exp.), 100.54-75 (Feb 4 low, 76.4% Fib exp.)
- Resistance: 101.59-78 (channel floor, 50% Fib exp.), 102.33 (38.2% Fib exp.)
The US Dollar looks vulnerable to deeper losses against the Japanese Yen after prices cleared support at the bottom of a rising channel set from early February. Sellers now aim to challenge the 61.8% Fibonacci expansion at 101.22, with a daily close below that exposing the 10054-75 area marked by the 76.4% level and the February 4 low. Alternatively, a reversal above the channel floor (101.59) and the 50% Fib at 101.78 targets the 38.2% expansion at 102.33.
Risk/reward considerations argue against entering short with prices trading in close proximity to relevant support. We will opt to remain on the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com