USD/JPY Technical Analysis: Passing on Long Trade Setup
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- USD/JPY Technical Strategy: Flat
- Support: 102.41, 102.10, 101.61
- Resistance: 102.89, 103.39, 104.18
The US Dollar corrected narrowly lower against the Japanese Yen after clearing a trend line that had capped the upside since January. A daily close above resistance at 102.90, the 61.8%Fibonacci expansion, exposes the 76.4% level at 103.39. Support lines up in the 102.41-50 area, marked by the broken trend line and the 50% Fib. Reversing back below that opens the door for a test of the 38.2 expansion at 102.10.
We are tactically opting not to pursue a long position. While the technical setup seems acceptable, a sharp SPX 500 downturn warns that risk aversion may trigger liquidation of JPY-funded carry trades and force USDJPY downward. With that in mind, we will monitor things from the sidelines for now.
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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.