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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 101.94 (38.2% Fib exp., channel top), 102.35 (23.6% Fib exp.)
- Resistance: 101.61 (50% Fib exp.), 101.28 (61.8% Fib exp.)
The US Dollar has met chart resistance as prices attempt to extend a four-day recovery against Japanese Yen. A daily close above 101.94, the intersection of the 38.2% Fibonacci expansion and the top of a falling channel set from late April, exposes the 23.6% level at 102.35. Alternatively, a reversal blow near-term support at 101.61, the 50% Fib, opens the way for a test of the 61.8% expansion at 101.28.
Risk/reward considerations argue against entering long with prices sitting squarely at resistance. On the other hand, taking up the short side seems premature in the absence of a defined bearish reversal signal. We will remain flat for the time being.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
