FxWirePro: USD/JPY edges higher from fresh 4-month lows at 110.19, downside intact, stay short

• USD/JPY hit fresh 4-month lows at 110.19 before edging higher to currently trade at 110.61 levels.
   
• Upside remains capped at 5-DMA at 110.76 and we see downside intact as long as 5-DMA resistance holds.
   
• The Japanese currency could rise if North Korea conflict increases risk-aversion, thereby bringing the pair lower.
   
• Focus now on the Bank of Japan (BOJ) policy meeting scheduled next week.
   
• BoJ is likely to stay pat and could revise growth forecasts while maintaining upbeat price forecasts.
   
• Technically, we see more weakness. Indicators on daily charts support more downside, the pair has broken major supports.
   
• Immediate support lies at 110.15 (61.8% Fib) ahead of 110 (channel base). Violation at channel base could see more downside.
   
• On the flipside, retrace above 5-DMA could see upside till 200-DMA. Breakout at 200-DMA could invalidate bearish bias.

Support levels - 110.15 (61.8% Fib retrace of 107.318 to 114.737 rally), 110 (channel base), 109.10 (weekly cloud base)

Resistance levels - 110.79 (5-DMA), 111, 111.69 (200-DMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-slumps-below-200W-SMA-at-11248-eyes-618-Fib-at-11015-1092277) has hit all targets.

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