USD/JPY Technical Analysis: Still Stalling Below 122.00 Level

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Talking Points:

• USD/JPY Technical Strategy: Flat
• Support: 120.82, 119.88, 117.17
• Resistance: 121.91, 123.88, 125.84

The US Dollar continues to stall below the 122.00 figure against the Japanese Yen as prices await resolution of a challenge to December’s swing high. Near-term resistance is in the 121.84-91 area (December 8 high, 38.2% Fibonacci expansion), 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 rising trend line support at 119.88.

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