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- USD/JPY Technical Strategy: Flat
- Support: 101.52, 101.06, 100.81
- Resistance: 101.81, 102.04, 102.25-28
The US Dollar advanced to the strongest level in two weeks against the Japanese Yen to put prices at key resistance defining the down trend since early June. A daily close above 101.81, the intersection of the 38.2% Fibonacci expansion and a falling channel top, initially exposes the 50% level at 102.04. Alternatively, a reversal below the 23.6% Fib at 101.52 opens the door for a challenge of the July 10 low at 101.06.
Risk/reward considerations argue against entering long with prices trading 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.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com