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- USD/JPY Technical Strategy: Flat
- Support: 101.39 (Feb 17 low), 100.75 (Feb 4 low)
- Resistance: 102.84 (23.6% Fib exp.), 104.14 (38.2% Fib exp.)
The US Dollar is trying to resume the push higher against the Japanese Yen. A daily close above resistance at 102.84, the 23.6% Fibonacci expansion, exposes the 38.2% level at 104.14. Initial support is at 101.38, the February 17 low, followed by the February 4 bottom at 100.75.
Risk/reward considerations argue against entering long with prices trading in such close proximity to relevant resistance. On the other hand, an actionable short trade signal is absent. Finally, a strong correlation between USD/JPY and the 10-year US Treasury yield (0.81 on 20-day percent change studies) warns against committing to a direction before the upcoming release of minutes from January’s FOMC meeting. We will stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com