USD/JPY Technical Analysis: Opting Not to Enter Long Trade
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- USD/JPY Technical Strategy: Flat
- Support: 102.39, 102.10, 101.61
- Resistance: 102.89, 103.39, 104.18
The US Dollar pulled back against the Japanese Yen as prices digest last week’s break resistance that limited the upside since January. Near-term resistance is at 102.90, the 61.8%Fibonacci expansion. A break above that on daily closing basis exposes the 76.4% level at 103.39. Alternatively, a move below support in the 102.39-50 area, marked by the broken trend line and the 50% Fib, clears the way for a challenge of the 38.2% expansion at 102.10.
We are tactically opting not to enter a long position. While the technical setup is compelling, a sharp SPX 500 reversal hints that on-coming risk aversion may trigger liquidation of Yen-funded carry trades and push USDJPY lower. With that in mind, we will stand aside 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.