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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 continues to trade sideways in a choppy range above the 122.00 figure against the Japanese having turned lower as expected. A daily close below the 50% Fibonacci retracementat 122.36 exposes the 61.8% level at 121.54. Alternatively, a reversal above the 38.2% Fibat 123.18 opens the door for a test of the 23.6% retracement at 124.20.

Prices are too close to support to justify entering short from a risk/reward perspective. On the other hand, the absence of a defined bullish reversal signal suggests that taking up the long side is premature. With that in mind, we will remain flat for now.

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

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