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 paused to consolidate losses after producing the largest daily drop in six months against the Japanese Yen. Near-term support is at 105.57, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the 61.8% level at 104.50. Alternatively, a turn back above the 38.2% Fib at 106.63 clears the way for a challenge of the 107.67-95 area marked by rising trend line set from May 2013 and the 23.6% Fib.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. With that in mind 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