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Talking Points:

• USD/JPY Technical Strategy: Flat

• Support: 115.37, 113.85, 112.77

• Resistance: 116.30, 117.82, 119.05

The US Dollar may be preparing to turn lower against the Japanese Yen as prices show a Harami candlestick pattern coupled with negative RSI diverge. A daily close below the 14.6% Fibonacci retracement at 114.50 exposes the 23.6% level at 113.52. Alternatively, a turn above the 23.6% Fib expansion at 116.30 clears the way for a challenge of the 38.2% threshold at 117.82.

A Harami formation is not a sufficient-enough reversal signal by itself without further confirmation. With that in mind, we will remain on the sidelines for the time being until a more actionable opportunity to establish a short position presents itself.

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Daily Chart - Created Using FXCM Marketscope 2.0

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

original source

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