USD/JPY Technical Analysis: Interim Support Found at 118.00

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Talking Points:

• USD/JPY Technical Strategy: Flat
• Support: 117.91, 115.48, 113.51
• Resistance: 119.41, 120.82, 121.91

The US Dollar corrected higher against the Japanese Yen after breaking downward from a consolidation range carved out in late December. Near-term resistance is at 119.41, the 14.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the December 23 high at 120.82. Alternatively, a reversal below the 23.6% Fib retracement at 117.91 opens the door for a test of the 38.2% threshold at 115.48.

Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind, 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