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Talking Points:
- USD/JPY Technical Strategy: Flat
- Support: 119.66, 118.93, 118.20
- Resistance: 120.24, 120.82, 121.84
The US Dollar appears vulnerable to deeper losses against the Japanese Yen after prices pierced a two-month rising trend line. A daily close below the 38.2% Fibonacci retracement at 119.66 exposes the 50% level at 118.93. Alternatively, a reversal above trend line support-turned-resistance at 120.24 opens the door for a challenge of the December 23 highat 120.82.
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 that 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
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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