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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 118.88, 118.45, 117.91
- Resistance: 119.32, 119.98, 120.73
The US Dollar recoiled from trend line resistance and may be readying to resume its expected reversal against the Japanese Yen. Near-term support is at 118.88, the 50% Fibonacci expansion, with a break below that on a daily closing basis exposing the 61.8% level at 118.45. Alternatively, a move above the 38.2% Fib at 119.32 clears the way for a test of falling trend line resistance at 119.98.
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 an actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
