FxWirePro: USD/JPY recovery capped at 5-DMA, bias lower, stay short

• USD/JPY snapped 6-consecutive days of losing streak and edged higher.
   
• However, recovery attempts failed shy of 111 handle, the pair slipped lower to currently trade at 110.69.
   
• Upside remains capped at 5-DMA at 110.98 which is immediate resistance. We see further upside only on decisive break above.
   
• Weaker tone surrounding the US Treasury bond yields continue to keeping a lid on any meaningful recovery.
   
• Technically, the pair is consolidating break below 200-DMA, is extending downside in a downward slopping channel.
   
• Indicators on daily charts support more downside, the pair has broken major supports.
   
• We see next major support at 110.15 (61.8% Fib) ahead of 110 (channel base).
   
• Violation at channel base could see more downside. On the flipside, retrace above 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 - 110.98 (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 TP1/2.

Recommendation: Book partial profits, hold for further downside.

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