USD/JPY Technical Analysis: Threatening to Derail Breakout
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- USD/JPY Technical Strategy: Flat
- Support: 119.35, 118.78, 118.02
- Resistance: 120.79, 121.55, 122.31
The US Dollar continued to retreat for a third consecutive day against the Japanese Yen, with prices threatening to negate last week’s upside breakout. Near-term trend line support is at 119.35, with a break below that on a daily closing basis exposing the 50% Fibonacci retracement at 118.78. Alternatively, a turn above the 38.2% Fib expansion at 120.79 clears the way for a test of the 50% threshold at 121.55.
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
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.