USD/JPY Technical Analysis: Sellers Overcome 106.00 Level
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- USD/JPY Technical Strategy: Flat
- Support: 105.57, 104.50, 103.19
- Resistance: 106.63, 107.95, 108.76
The US Dollar issued the largest daily decline in six months against the Japanese Yen, with sellers claiming a foothold below the 106.00 figure. A daily close below the 50% Fibonacci retracementat 105.57 exposes the 61.8% level at 104.50. Alternatively, a reversal above the 38.2% Fib at 106.63 opens the door for a test of the 107.65-95 area marked by rising trend line set from May 2013 and the 23.6% Fib.
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