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USD/JPY Technical Analysis: Sellers Overcome 106.00 Level

USD/JPY Technical Analysis: Sellers Overcome 106.00 Level

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • 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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USD/JPY Technical Analysis: Sellers Overcome 106.00 Level

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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