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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 101.71-88 (23.6% Fib exp., trend line), 101.03 (38.2% Fib exp.)
- Resistance: 102.82 (Feb 21 high)
Prices are once again testing below supportat a rising trend line set from early October, a barrier reinforced by the 23.6% Fibonacci expansion at 101.71. A break below the latter level initially exposes the 38.2% level at 101.03. Near-term resistance is at 102.82, the February 21 high.
Confirmation of a downside breakout requires a daily close below support, which remains absent for the time being. This suggests it is premature to enter short for now. On the other hand, positioning offers no clear signal to trigger a long position. We will opt not to remain on the sidelines for now.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com