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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 100.98 (50% Fib ret.), 99.93 (61.8% Fib ret.)
- Resistance: 101.82-102.02 (channel bottom, 38.2% Fib ret.), 103.32 (23.6% Fib ret.)
The Japanese Yen is attempting to resume its push higher against the US Dollar after a brief pullback yesterday. Prices are testing support at 100.98, the 50% Fibonacci retracement, with a break below that targeting the 61.8% level at 99.93. Alternatively, a push above the 101.82-102.02 region marked by the 38.2% Fib and the underside of a falling channel set from mid-December aims for the 23.6% retracement at 103.32.
Risk/reward considering argue against taking a short trade with prices in such close proximity to relevant support. The absence of a clear-cut upward reversal signal likewise warns against trying a long position. As such, we will remain on the sidelines for the time being until something more palatable presents itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com