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- USD/JPY Technical Strategy: Flat
- Support: 101.59 (23.6% Fib exp.), 100.90 (38.2% Fib ret.)
- Resistance: 102.96 (Feb 11 high)
The Japanese Yen is launching a swift recovery against the US Dollar after putting in a Hanging Man candlestick, with USD/JPY on pace to issue largest drop in eight days. A break below support at 101.59, the 23.6% Fibonacci expansion, targets the 38.2% level at 100.90. Near-term resistance is at 102.69, the February 11 high.
A short position at current levels looks unattractive from a risk/reward perspective as prices trade squarely at relevant support. On the other hand, a long trade seems premature absent confirmation of reversal. On balance, we will remain on the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com