USD/JPY Technical Analysis: 2-Month Resistance Broken
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- USD/JPY Technical Strategy: Flat
- Support: 120.01, 118.78, 118.02
- Resistance: 120.79, 121.55, 122.31
The US Dollar broke two-month trend resistance against the Japanese Yen, with prices now trying to clear a path above the 121.00 figure. Near-term resistance is at 120.79, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 121.55. Alternatively, a turn below trend line resistance-turned-support at 120.01 clears the way for a test of the 50% Fib retracement at 118.78.
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 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