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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 101.82, 101.43, 101.04
- Resistance: 102.30, 102.60, 103.08
The US Dollar touched to the lowest level in three weeks against the Japanese Yen, validating our reluctance to enter a long position. Sellers are testing support at 101.82, the 38.2% Fibonacci expansion, with a daily close below that exposing the 50% level at 101.43. Alternatively, a reversal above the 23.6% Fib at 102.30 opens the door for a test of the 14.6% expansion at 102.60.
While our long-term view favors USDJPY gains, last week’s drop in the S&P 500 hints that risk aversion may drive an unwinding of Yen-funded carry trades and continue to push the Japanese unit higher in the near- to medium-term. With that in mind, we remain flat.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
