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- USD/JPY Technical Strategy: Flat
- Support: 119.41, 117.91, 115.48
- Resistance: 122.49, 124.12, 125.74
The US Dollar is trying to turn lower as expected against Japanese Yen, with a bearish Three Inside Down candle pattern now adding to the case for weakness. A daily close below 119.41, the intersection of rising trend support and the 14.6% Fibonacci retracement, exposes the 23.6% level at 117.91. Alternatively, a reversal above the 38.2% Fib at 122.49 clears the way for a test of the 50% expansion at 124.12.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com