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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 115.48, 113.51, 111.55
- Resistance: 117.91, 120.82, 121.91
The US Dollar may be preparing to turn higher against the Japanese Yen after prices put in a Bullish Engulfing candlestick pattern. A daily close above the 23.6%Fibonacci retracement at 117.91 exposes the December 23 high at 120.82. Alternatively, a turn below the 38.2% Fib at 115.48 clears the way for a challenge of the 50% expansion at 113.51.
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
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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