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Talking Points:
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USD/JPY Technical Strategy: Flat
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Support: 114.06 113.13 111.61
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Resistance: 115.29 116.60 117.67
The US Dollar may be preparing to move downward against the Japanese Yen after prices put in a Bearish Engulfing candle pattern. A daily close below the 14.6% Fibonacci retracementat 114.06 exposes the 23.6% level at 113.13. Alternatively a turn above the 23.6% Fib expansion at 115.29 clears the way for a challenge of the 38.2% threshold at 116.60.
While entering short appears compelling from a technical perspective we will tactically opt to stand aside for now. USDJPY continues to show a formidable correlation to the S&P 500 (0.88 on rolling 20-day studies) and we are leery of selling the pair considering the index has just hit another record high.
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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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