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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 120.82, 119.49, 117.17
- Resistance: 122.35, 123.88, 125.84
The US Dollar is grinding through key chart barriers against the Japanese Yen, with prices now eyeing December’s swing top. Near-term resistance is in the 121.84-122.35 area (December 8 high, 38.2% Fibonacci expansion, channel top), with a break above that on a daily closing basis exposing the 50% level at 123.88. Alternatively, a reversal below resistance-turned-support at 120.82, the December 23 high, clears the way for a challenge of the channel floor at 119.49.
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
