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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 101.22 (61.8% Fib exp.), 100.54-75 (Feb 4 low, 76.4% Fib exp.)
- Resistance: 101.62-78 (channel floor, 50% Fib exp.), 102.33 (38.2% Fib exp.)
The US Dollar may be at risk of further selling against the Japanese Yen after prices broke below support at the bottom of a rising channel set from early February. The next downside barrier lines up at 101.22, the 61.8% Fibonacci expansion, with a break beneath that targeting the 76.4% level and the February 4 low in the 10054-75 area. Alternatively, a turn back above the channel bottom (101.62) and the 50% Fib at 101.78 aims for the 38.2% expansion at 102.33.
The available trading range is too narrow to take a short position and utilize a strategy employing a daily-close activated stop-loss (as is the case for our approach). With that in mind, we will remain flat for the time being.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com