FxWirePro: USD/JPY breaches 5-DMA support, dovish remarks by Fed Chair Powell support USD bears

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.