To receive Ilya's analysis directly via email, please SIGN UP HERE
- 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.
Add these technical levels directly to your charts with our Support/Resistance Wizard app!
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com