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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 117.48, 116.96, 115.71
- Resistance: 119.05, 120.27, 121.79
The US Dollar pulled back against the Japanese Yen as expected after prices produced a Shooting Star candlestick. Near-term rising channel floor support is at 117.48, with a break below that on a daily closing basis exposing the 14.6% level at 116.96. Alternatively, a reversal above the 50% Fib expansion at 119.05 opens the door for at test of the 61.8% threshold at 120.27.
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 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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