FxWirePro: USD/JPY hovers around strong trendline support at 108.40, good to go short on break below

• USD/JPY hovers around strong trendline support at 108.40, we see weakness on break below.
   
• Technical studies are biased lower, RSI and stochs point south and we see -ve DMI dominance.
   
• Price action is below daily cloud and major moving averages and recovery seems to be capped at 5-DMA.
   
• Break below 108.40 will see test of 108 levels ahead of 107.31 (Sept 8 low).
   
• On the flipside, close above 5-DMA could see test of 20-DMA at 109.52. Break at 20-DMA could invalidate bearish bias.
   
• Focus now will be on the US inflation report due to be released on Wednesday at 13:30 GMT.

Support levels - 108.40 (trendline), 108.13 (Double bottom), 107.31 (Sept 8 low)

Resistance levels - 108.76 (5-DMA), 108.90 (78.6% Fib), 109.52 (20-DMA)

Recommendation: Good to go short on break below 108.40, SL: 108.90, TP: 108.15/ 108/ 107.35.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -76.1966 (Bearish), while Hourly JPY Spot Index was at 136.812 (Bullish) at 0440 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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