USD/JPY Technical Analysis: Resistance Above 114.00 Exposed
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- USD/JPY Technical Strategy: Flat
- Support: 112.08, 110.76, 109.70
- Resistance: 114.21, 115.53, 116.34
The US Dollar accelerated upward after an expansion of BOJ stimulus having turned higher as expected following the appearance of a Morning Star candle pattern. A daily close above the 100% Fibonacci expansion at 114.21 exposes the 114.6% level at 115.53. Alternatively, a turn back below the 76.4% Fib at 112.08 clears the way for a challenge of the 61.8% expansion at 110.76.
While entering long is a tempting proposition, we will tactically opt to stand aside. We are leery of on-coming risk aversion as traders react to looming Fed stimulus withdrawal. This may trigger JPY short-covering amid carry trade liquidation. As such, we will continue to stand aside.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com