USD/JPY Technical Analysis: Prices Drop to Lowest in 5 Weeks
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- USD/JPY Technical Strategy: Flat
- Support: 122.84, 122.26, 121.55
- Resistance: 123.41, 124.12, 124.56
The US Dollar continues to sink against the Japanese Yen, with prices dropping to the lowest level in five weeks. Near-term support is at 122.84, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the 61.8% level at 122.26. Alternatively, a turn above the 38.2% Fib at 123.41 clears the way for a test of the 23.6% retracement at 124.12.
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