USD/JPY Technical Analysis: Aiming Above 119.00 Figure
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- USD/JPY Technical Strategy: Flat
- Support: 117.82, 116.30, 115.37
- Resistance: 119.05, 120.27, 121.79
The US Dollar continues to advance against the Japanese Yen, with prices working on the sixth consecutive daily advance. Near-term resistance is at 119.05, the 50% Fibonacci expansion, with a break above that on a daily closing basis exposing the 61.8% level at 120.27. Alternatively, a reversal below the 38.2% Fib at 117.82 opens the door for a test of the 23.6% expansion at 116.30.
While entering long seems attractive from a purely technical perspective, we will tactically opt to stand aside. USDJPY remains closely correlated to the MSCI World Stock Index – a proxy for market-wide sentiment trends – and we fear that the pair will reverse violently lower as Fed rate hike bets trigger risk aversion.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com