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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 123.59, 123.00, 122.20
- Resistance: 123.96, 124.55, 125.03
The US Dollar extended its recovery against the Japanese Yen for a second consecutive day, with buyers probing above the 124.00 figure. Near-term resistance is at 123.96, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 38.2% level at 124.55. Alternatively, a move below the 14.6% Fib at 123.59 clears the way for a challenge of the July 27 low at 123.00.
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 an actionable opportunity to present itself.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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