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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 104.04, 103.64, 103.15
- Resistance: 104.34-44, 104.84, 105.24
The US Dollar has set a six-month high against the Japanese Yen as prices work their way toward the 105.00 figure. Near-term resistance is in the 10434-44 area, marked by the 23.6% Fibonacci expansion and the August 25 high. A break above that on a daily closing basis exposes the 38.2% level at 104.84. Alternatively, a reversal below the 14.6% expansion at 104.04 clears the way for a test of the 23.6% Fib retracement at 103.64.
While prices are testing above resistance, a defined breakout is unconfirmed for now. That suggests entering long at market is premature. On the other hand, fading the rally requires the appearance of a bearish reversal signal. Needless to say, this is absent at the moment. We will continue to watch from the sidelines.
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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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