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Talking Points:
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USD/JPY Technical Strategy: Flat
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Support: 107.89, 106.54, 105.45
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Resistance: 110.19, 110.65, 111.54
The US Dollar pushed higher anew against the Japanese Yen but conspicuously failed to breach October’s high above the 110.00 figure. A daily close below the 107.89-108.00 zone bracketed by the October 2 low and the 23.6% Fibonacci retracementexposes the 38.2% level at 106.54. Alternatively, a reversal above the 110.08-19 area marked by the 23.6% Fib expansion and the October 1 high opens the door for a challenge of the August 15 2008 top at 110.65.
Negative RSI divergence hints at ebbing upside momentum, warning against entering long. Furthermore, prices are too close to resistance to justify buying the pair from a risk/reward perspective. On the other hand, the absence of a defined bearish signal argues that entering short is premature. We will remain flat for now.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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