FxWirePro: USD/JPY recovery lacks traction, struggles to hold break above 21-EMA, good to go short on rallies

• USD/JPY has been falling off from highs at 111.39 on May 21st trade, bias still bearish.
   
• The pair has hit 2-week lows at 108.95, before paring some losses to currently trade at 109.56.
   
• Technical indicators on intraday charts are turning bearish, we feel the upside lacks traction.
   
• FOMC's dovish showing on Wednesday eased inflation concerns, 10-year UST yields fell below the 3% critical level, weighing on the Greenback.
   
• Also, safe-haven bids for the Yen likely to be underpinned across the board after US President Trump called off a June summit with the North Korean leader, Kim Jong Un, re-igniting geopolitical tensions.
   
• Technical studies are turning bearish. The pair has slipped below 200-DMA. We see bearish divergence on daily charts which adds to downside pressure.
   
• Focus shifts towards the US durable goods, revised UoM consumer sentiment data and Fed Chair Powell’s speech for fresh trading impetus.

Support levels - 109, 108.81 (32.8% Fib), 108.27 (100-DMA)

Resistance levels - 109.64 (21-EMA), 109.80 (23.6% Fib), 110.17 (converged 5 and 200-DMA)

Recommendation: Good to go short on rallies around 109.60/70, SL: 110.20, TP: 109/ 108.80/ 108.30

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