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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 101.41 (50% Fib exp., trend line), 100.86 (61.8% Fib exp.)
- Resistance:101.96 (38.2% Fib exp.), 102.65 (23.6% Fib exp.)
The US Dollar moved aggressively lower against the Japanese Yen as expected after the pair produced a bearish Evening Star candlestick pattern. Prices are approaching support at 101.41, the intersection of a rising trend line set from early February and the 50% Fibonacci expansion. A break below this barrier targets the 61.8% level at 100.86. Alternatively, a reversal back above the 38.2% Fib at 101.96 aims for the 23.6% expansion at 102.65.
Prices are too close to relevant support to justify a short position from a risk/reward perspective. On the other hand, a viable reversal signal arguing in favor of a long trade is absent for the time being.We will remain on the sidelines until a more actionable setup presents itself.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com