USD/JPY Technical Analysis: Eyeing Support Below 118.00
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- USD/JPY Technical Strategy: Flat
- Positioning Favors Weakness as Prices Consolidate Near 119.00
- Risk/Reward Consolations Argue Against Taking Short Position
The US Dollar looks poised to continue lower against the Japanese Yen after prices paused to consolidate having hit a two-week low. The pair may be resuming the down trend initiated with a break of 2015 rising trend line support in late August having corrected to re-test the barrier as newly-minted resistance.
Near-term support is now at 118.21, the 38.2% Fibonacci expansion, with a break below that on a daily closing basis exposing the 50% level at 117.13. Alternatively, a move above support-turned-resistance at 119.33, the September 1 close, opens the door for a challenge of the September 3 high at 120.69.
An actionable trade setup is absent for now. The available trading range is smaller than 20-day ATR, suggesting prices are wedged too closely between support and resistance to justify taking a position from a risk/reward perspective (assuming a stop-loss triggered on a daily closing basis, as our strategy envisions). With that in mind, we will remain for the time being.
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