USD/JPY Technical Analysis: Trend Line Support Holds Up
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- USD/JPY Technical Strategy: Flat
- Support: 120.21, 119.66, 118.93
- Resistance: 120.82, 121.84, 122.66
The US Dollar rebounded from support guiding the uptrend over the past two months after probing below 120.00 against the Japanese Yen. Near-term trend line support is at 120.21, with a break below that on a daily closing basis exposing the 38.2% Fibonacci retracement at 119.66. Alternatively, a move above support-turned-resistance at 120.82, the December 23 high, clears the way for a challenge the December 8 peak at 121.84.
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