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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 104.71, 104.12, 103.54
- Resistance: 105.43, 105.77, 106.44
The US Dollar may be carving out a top against the Japanese Yen after rising to a six-year as negative RSI divergence warns of ebbing bullish momentum. A daily close below rising trend line support at 104.71 exposes the April 4 high at 104.12. Alternatively, a turn above January 2014 swing high at 105.43 clears the way for a test of the 23.6% Fibonacci expansion at 105.77.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind we will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
