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USD/JPY chart on Trading View used for analysis
- USD/JPY slips below 5-DMA support after the pair was rejected at 114 handle on Wednesday's trade.
- Fed Chair Powell's comments on the policy outlook weighed on the greenback, dragging the pair lower.
- Powell said that the policy rate was 'just below' their estimates of neutral and added that they were not on a pre-set policy rate path and they were paying very close attention to the data.
- "The Fed balancing risks of shortening expansion, on one hand, higher inflation and instability on the other," Powell stated.
- A more data dependent Fed will likely keep a close watch on the JP/US spread and its impact from the outcome of Xi/Trump summit.
- Technical indicators still hold upside bias. The pair is holding support at 21-EMA at 113.22.
- Break below 21-EMA will see further weakness. Dip till cloud top 112.67 likely.
Support levels - 113.22 (21-EMA), 112.67 (cloud top)
Resistance levels - 113.45 (5-DMA), 114 (trendline)
For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
