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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 119.48, 117.98, 115.55
- Resistance: 121.91, 123.88, 125.84
The US Dollar looks poised to move to challenge December’s high after reclaiming a foothold above the 120.00 figure. Near-term resistance is at 121.91, the 38.2% Fibonacci expansion, with a break above that exposing the 50% level at 123.88. Alternatively, a reversal below the 23.6% Fib at 119.48 opens the door for a challenge of the 14.6% level at 117.98.
While entering long is tempting from a purely technical perspective, we will tactically opt to stand aside. We suspect a Yen recovery on the back of year-end capital flows may be ahead, warning against taking bets on the currency’s decline. As such, 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
