USD/JPY Technical Analysis: Trying to Clear Path Sub-123.00

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Talking Points:

• USD/JPY Technical Strategy: Flat
• Support: 123.18, 122.39, 121.75
• Resistance: 123.67, 124.56, 125.85

The US Dollar turned lower against the Japanese Yen as we suspected after finding resistance below the 125.00 figure. Near-term support is at 123.18, the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposing the 38.2% level at 122.39. Alternatively, a reversal above the 14.6% expansion at 123.67 clears the way for a challenge of the 76.4% Fib retracement at 124.56.

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