USD/JPY Technical Analysis: Yen Drops Most in Seven Weeks
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- USD/JPY Technical Strategy: Flat
- Support: 117.98, 115.55, 114.13
- Resistance: 119.48, 121.91, 123.88
The US Dollar launched a sharp recovery against the Japanese Yen, yielding the largest daily advance in seven weeks. A daily close above the 23.6% Fibonacci expansion at 119.48 exposes the 38.2% level at 121.91. Alternatively, a reversal below the 14.6% Fib at 117.98 clears the way for a test of the December 16 low at 155.55.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short 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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.