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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 120.70, 119.48, 117.98
- Resistance: 121.91, 123.13, 124.08
The US Dollar turned sharply lower against the Japanese Yen, declining to the lowest level in nearly two months. A daily close below the 50% Fibonacci retracementat 120.70 exposes the 61.8% level at 119.48. Alternatively, a reversal above the 38.2% Fibat 121.91opens the door for a test of falling trend line resistance at 123.13.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com