USD/JPY Technical Analysis: Yen Gains Most in Six Months
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- USD/JPY Technical Strategy: Flat
- Support: 108.76, 107.95, 106.63
- Resistance: 109.68, 110.43, 111.64
The US Dollar turned sharply lower against the Japanese Yen as expected, posting the largest daily drop in six months. A daily close below the 14.6% Fibonacci retracement at 108.76 exposes the 23.6% level at 107.95. Alternatively, a turn above the 14.6% Fib expansion at 109.68 opens the door for a challenge of the 23.6% threshold at 110.43.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com