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Talking Points:
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USD/JPY Technical Strategy: Flat
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Support: 107.31 106.50 105.18
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Resistance: 108.63 110.08 110.76
The US Dollar rose as expected against the Japanese Yen after producing a bullish Morning Star candlestick pattern. Near-term resistance is in the 108.40-63 area marked by the October 2 close and the 38.2% Fibonacci retracement. A break above that on a daily closing basis exposes the 109.70-110.08 zone (50% level October 1 high). Alternatively a turn back below the 23.6% Fib at 107.31 clears the way for a challenge of the 14.6% expansion at 106.50.
Prices are too close to resistance to justify entering long from a risk/reward perspective. On the other hand the absence of a defined bearish reversal signal suggests that taking up the short side is premature. With that in mind 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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