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Talking Points:

• USD/JPY Technical Strategy: Flat

• Support:122.36, 121.54, 120.52

• Resistance:123.18, 124.20, 124.83

The US Dollar is trying to recover from familiar range support after an expected retreat against the Japanese Yen. Near-term support is at 122.36, the 50% Fibonacci retracement, with a break below that on a daily closing basis exposing the 61.8% level at 121.54. Alternatively, a turn above the 38.2% Fibat 123.18 clears the way for a challenge of the 23.6% retracement at 124.20.

Risk/reward considerations argue against entering long with prices 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, waiting for an actionable opportunity to present itself.

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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