USD/JPY Technical Analysis: Pivotal Support Under Pressure
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- USD/JPY Technical Strategy: Flat
- Support: 107.61, 106.58, 105.20
- Resistance: 109.65, 110.65, 112.40
The US Dollar pulled back from the 110.00 figure against the Japanese Yen to test a defining layer of chart support. A daily close below the 107.61-95 area marked by rising trend line resistance-turned-support and the 61.8% Fibonacci expansion exposes the 50% level at 106.58. Alternatively, a reversal above the 76.4% Fib at 109.65 clears the way for a challenge of the August 2008 high at 110.65.
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