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Talking Points:

• USD/JPY Technical Strategy: Flat

• Support: 116.64, 115.48, 113.51

• Resistance: 117.91, 118.96, 120.82

The US Dollar edged lower for a fourth consecutive day against the Japanese Yen, dipping to the lowest level in a month. A daily close below falling channel floor support at 116.64 exposes the 38.2% Fibonacci retracement at 115.48. Alternatively, a reversal above the 23.6% Fib retracement at 117.91 opens the door for a test of channel top resistance at 118.96.

Risk/reward considerations argue against entering short with prices in close proximity to support. On the other hand, the absence of a defined bullish reversal signal suggests taking up the long side is premature. We will remain flat for now, waiting for a more actionable opportunity to present itself.

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Daily Chart - Created Using FXCM Marketscope

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

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