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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 have set a bottom against the Japanese Yen after prices produced a Bullish Engulfing candlestick pattern. Near-term resistance is at 117.91, the 23.6%Fibonacci retracement, with a break above that on a daily closing basis exposing the December 23 high at 120.82. Alternatively, a reversal below the 38.2% Fib at 115.48 opens the door for a test of the 50% expansion at 113.51.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand, the absence of a defined bearish reversal signal suggests that taking up the short 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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