USD/JPY Technical Analysis: Support Sub-120.00 Challenged
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- USD/JPY Technical Strategy: Flat
- Support: 119.66, 118.93, 118.20
- Resistance: 120.32, 120.82, 121.84
The US Dollar may be building a larger downward reversal against the Japanese Yen after prices overturning a two-month uptrend. Near-term support is at 119.66, the 38.2% Fibonacci retracement, with a break below that on a daily closing basis exposing the 50% level at 118.93. Alternatively, a turn above trend line support-turned-resistance at 120.32 clears the way for a test of the December 23 highat 120.82.
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 long 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