USD/JPY Technical Analysis: Yen Recovery May Be Brewing
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- USD/JPY Technical Strategy: Flat
- Support: 116.96, 115.71, 113.70
- Resistance: 119.24, 120.48, 122.49
The US Dollar may be on the verge lower against the Japanese Yen as negative RSI divergence points to diminishing upside momentum. Near-term support is at 116.96, the 14.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 23.6% level at 115.71. Alternatively, a push above the 14.6% Fib expansion at 119.24opens the door for a test of the 23.6% threshold at 120.48.
Entering short seems premature, with RSI divergence not actionable by itself without further confirmation. On the other hand, a long trade is unattractive from a risk/reward perspective as prices sit in close proximity to resistance. We will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com