USD/JPY Technical Analysis: Rebound Capped Above 123.00
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- USD/JPY Technical Strategy: Flat
- Support: 122.36, 121.54, 120.52
- Resistance: 123.46, 124.09, 125.11
The US Dollar remains in digestion mode after turning downward as expected against the Japanese Yen. Near-term support is at 122.36, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the 61.8% level at 121.54. Alternatively, a turn above the 14.6% Fibexpansion at 123.46 clears the way for a challenge of the 23.6% threshold at 124.09.
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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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com