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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 106.44, 105.77, 105.43
- Resistance: 106.99, 107.54, 108.22
The US Dollar surged to test the 107.00 figure against the Japanese Yen for the first time since September 2008. Near-term resistance is at 106.99, the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 61.8% level at 107.54. Alternatively, a reversal below the 38.2% Fib at 106.44 opens the door for a challenge of the 23.6% expansion at 105.77, followed January high at 105.43.
Risk/reward considerations argue against entering long with prices sitting at resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. 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
