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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 103.64, 103.15, 102.75
- Resistance: 104.14, 104.44, 105.19
The US Dollar may be carving out a near-term top against the Japanese Yen after prices formed a bearish Evening Star candlestick pattern. Near-term support is at 103.64, the 23.6% Fibonacci retracement, with a break below that on a daily closing basis exposing the 38.2% level at 103.15. Alternatively, a turn reversal above the 23.6% Fib expansion at 104.14 clears the way for a test of the August 25 high at 104.44.
Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. With that in mind we will remain flat for now.
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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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