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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 106.50, 105.57, 104.50
- Resistance: 107.31, 108.63, 109.70
The US Dollar may be carving out a bottom against the Japanese Yen after prices put in a bullish Morning Star candlestick pattern. A daily close above the 23.6% Fibonacci retracementat 107.28 exposes the 38.2% level at 108.57. Alternatively, a reversal back below the 14.6% Fib at 106.48 opens the door for a test of the 50% Fib retracement at 105.57.
Risk/reward considerations argue against entering long with prices in close proximity to resistance. On the other hand, the absence of a defined bearish reversal signal suggests taking up the short side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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