The US Dollar has sunk to key support against the Japanese Yen, with sellers threatening to produce a major downward breakout. A daily close below support in the 101.61-67 area - marked by the 50% Fibonacci expansion and the bottom of a rising channel set from early February - initially exposes the 61.8% level at 101.28. Near-term resistance is at 101.94, the 38.2% Fib, with a move above that eyeing the 23.6% expansion at 102.35.
Entering short at current levels looks unattractive from a risk/reward perspective with prices in close proximity to relevant support. On the other hand, the absence of a defined upward reversal signal argues against taking up the long side. We will remain flat for the time being.