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- USD/JPY Technical Strategy: Flat
- Support: 104.68, 104.12, 103.54
- Resistance: 105.35-43, 105.73, 106.35
The US Dollar may be vulnerable to a correction lower against the Japanese Yen after spiking to the highest level in six years. Negative RSI divergence warns of ebbing upside momentum as prices test resistance in the 105.35-43 area, marked by the 14.6% Fibonacci expansion and the January 2014 swing high, hinting a move downward may be ahead. A break below rising trend line support at 104.68 exposes the April 4 high at 104.12. Alternatively, a turn above resistance opens the door for a challenge of the 23.6% level at 105.73.
Confirmation of a bearish reversal is absent for the time being, suggesting entering is premature at this stage. We will stand aside, looking for any on-coming pullback as an opportunity to enter long in line with the longer-term uptrend.
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Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com