USD/JPY Technical Analysis: Passing on Long Trade Setup

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Talking Points:

• USD/JPY Technical Strategy: Flat
• Support: 118.71, 118.32, 117.52
• Resistance: 119.74, 120.68, 121.41

The US Dollar appears to have secured an upside breakout against the Japanese Yen after prices cleared resistance capping gains since mid-March. A daily close above the 38.2% Fibonacci expansion at 120.68 exposes the 50% level at 121.41. Alternatively, a reversal below trend line resistance-turned-support at 119.68 opens the door for a challenge of the April 3 lowat 118.71.

While entering a long trade seems compelling from a purely technical perspective, we are leery of committing to a directional bias ahead of this week’s pivotal event risk, where outcomes may significantly upset positioning. As such, we will opt to remain for now.

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Daily Chart - Created Using FXCM Marketscope

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com