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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 116.96, 116.37, 115.78
- Resistance: 118.22, 118.86, 120.82
The US Dollar remains in digestion mode below the 119.00 figure against the Japanese Yen as prices await a clear-cut directional signal. A daily close above channel top resistance at 118.22 exposes the January 20 high at 118.86. Alternatively, a turn below the intersection of channel floor support and the 38.2% Fibonacci expansion in the 116.96-117.12 area clears the way for a challenge of the 50% level at 116.37.
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 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
