USD/JPY—The Dollar Breaks through the Range Floor

USD/JPY (¥117.905)

Trade Strategy: Stand Aside

• Resistance Levels: 117.70, 118.85, 120.80
• Support Levels: 116.95, 116.40, 115.80

The USD/JPY is setting itself up for steeper losses as the Dollar is losing some steam in this market. Please see the below daily MT 4 chart and note the US Dollar has now dipped below the weekly range support at 117.681/0.

Short term support is lining up at 116.95. A daily close below this level will challenge the next technical support at 116.40. Should the Dollar reverse direction, pushing the USD/JPY higher once again, we need to close above 117.70. If this happens, price action will then challenge the technical resistance level at 118.85.

I am opting to stand aside for tight now. Why? Price action is trading too close to a support and resistance level in a tight consolidation pattern to warrant either a long or short trade at this time. Especially from a risk to reward perspective. Timing is just not right. Until a more convincing trading opportunity comes along, my strategy is flat.