USD/JPY Technical Analysis: Chart Setup Argues for Pullback
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- USD/JPY Technical Strategy: Flat
- Support: 114.06, 113.13, 111.61
- Resistance: 115.29, 116.60, 117.67
The US Dollar may be forming a top above the 115.00 figure against the Japanese Yen following the appearance of a Bearish Engulfing candle pattern. Near-term support is at 114.06, the 14.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 23.6% level at 113.13. Alternatively, a reversal above the 23.6% Fib expansion at 115.29 opens the door for a test of the 38.2% threshold at 116.60.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long 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