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The US Dollar appreciated against the Japanese Yen as expected after the currency pair produced a bullish Morning Star candlestick pattern at channel support set from February. Buyers are aiming to challenge the 38.2% Fibonacci expansion at 102.60, with a break above that on a daily closing basis exposing the 50% level at 103.00. Alternatively, a turn back below the 38.2% Fib at 102.11 targets the channel floor, now at 101.52.
Prices are trading too close to relevant resistance to make a long trade attractive from a risk/reward perspective. On the other hand, the absence of a bearish reversal signal argues against taking up the short side. We will continue to stand aside for now, waiting for an actionable opportunity to present itself.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com