- USD/JPY breaks below 200-day MA at 110.21 amid escalating trade tensions between US and China.
- U.S. President Donald Trump threatened on Monday to impose a 10 percent tariff on $200 billion of Chinese goods.
- The world's two biggest economies appear increasingly headed towards a full-fledged trade war keeping markets risk averse.
- The major is trading 0.79% lower on the day at around 109.68 at the time of writing.
- Upside in the pair was capped at major trendline resistance at 110.90 on Friday's trade.
- Further we evidence a Doji formation at highs which raises scope for weakness in the pair.
- Stochs are on verge of rollover from overbought territory and we see -ve DMI crossover on +ve DMI.
- Daily cloud offers strong support at 108.83. Violation there could see test of 38.2% Fib at 108.49.
- On the upside, the pair needs to break above major trendline resistance at 110.85 for further upside.
Support levels - 109.68 (50% Fib), 109.20 (June 8 low), 109
Resistance levels - 110.21 (200-DMA), 110.37 (5-DMA), 110.85 (trendline)
Recommendation: Good to go short on upticks around 109.75/85, SL: 110.25, TP: 109.20/ 109/ 108.65
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 72.4078 (Neutral), while Hourly JPY Spot Index was at 74.6758 (Neutral) at 0845 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.


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