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USD/JPY Technical Analysis: Yen Drops Most in 3 Weeks

USD/JPY Technical Analysis: Yen Drops Most in 3 Weeks

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • USD/JPY Technical Strategy: Flat
  • Support: 107.31, 106.50, 105.18
  • Resistance: 108.63, 110.08, 110.76

The US Dollar moved higher against the Japanese Yen as expected after prices put in a bullish Morning Star candlestick pattern. A daily close above the 38.2% Fibonacci retracement at 108.63 exposes the 109.70-110.08 area marked by the 50% level and the October 1 high. Alternatively, a reversal back below the 23.6% Fib at 107.31 opens the door for a test of the 14.6% expansion at 106.50.

Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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: Yen Drops Most in 3 Weeks

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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