- USD/JPY retreats from 3-month highs at 110.03 after Fed disappointed markets with less hawkish-than-expected statement.
- There was no hint towards a rate hike in June and the statement was also largely unchanged.
- The pair has formed a 'Bearish Cypher' pattern which adds to bearish bias. We also evidence a Doji formation at highs.
- Immediate support is seen at 5-DMA at 109.54, break below will see test of 100-DMA at 108.74.
- Technical indicators are also biased lower. 'Bearish Divergence' on stochs adds to downside bias.
- US Non-Farm Payroll due Friday will be in focus for further direction. On tap today are Jobless Claims at 12:30 GMT followed by Markit PMIs at 14:00 GMT.
Support levels - 109.54 (5-DMA), 109, 108.74 (100-DMA), 108.49 (38.2% Fib)
Resistance levels - 110, 110.20 (200-DMA), 110.87 (61.8% Fib)
Recommendation: Stay short on break below 5-DMA, SL: 110, TP: 109/ 108.75
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 81.5717(Bullish), while Hourly JPY Spot Index was at -17.8246 (Neutral) at 1100 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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