USD/JPY Technical Analysis: Consolidating at 2-Month High
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- USD/JPY Technical Strategy: Flat
- Support: 124.17, 123.28, 122.18
- Resistance: 125.05, 126.15, 127.93
The US Dollar paused to digest gains against the Japanese Yen after rising to the strongest level in two months. Near-term resistance is at 125.05, the 61.8% Fibonacci expansion, with a break above that on a daily closing basis exposing the 125.85-126.15 area (June 5 high, 76.4% level). Alternatively, a move below the 50% Fib at 124.17 clears the way for a challenge of the 38.2% expansion at 123.28.
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