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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 122.36, 121.54, 120.52
- Resistance: 123.18, 124.20, 124.83
The US Dollar turned sharply lower against the Japanese Yen as expected, with prices producing the largest daily decline in seven months. Near-term support is at 122.36, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the 61.8% level at 121.54. Alternatively, a turn above the 38.2% Fibat 123.18 clears the way for a challenge of the 23.6% retracement at 124.20.
Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for an actionable opportunity to present itself.
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— Written by Ilya Spivak, Currency Strategist for DailyFX.com