USD/JPY Technical Analysis: Yen Sinks to Seven-Year Low
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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 continues to race higher having turned upward as expected following the appearance of a Morning Star candle pattern. Near-term resistance is at 114.21, the 100% Fibonacci expansion, with a break above that on a daily closing basis exposing the 114.6% level at 115.53. Alternatively, a reversal back below the 76.4% Fib at 112.08 opens the door for a test of the 61.8% expansion at 110.76.
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 that 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