FxWirePro: USD/JPY erases early gains, slips below 5-DMA

USD/JPY chart - Trading View 

USD/JPY was trading 0.07% lower on the day at 109.54 at around 04:00 GMT, outlook neutral.

The pair opened the week's trade on a positive note as the U.S. dollar tracked US Treasury yields higher.

The US Treasury yields witness some pullback after Federal Reserve Chair Jerome Powell's comments offering a boost to the US dollar.

Powell said early Monday said that the US economy was poised for a stronger recovery, but added that COVID-19 remains a threat.

Focus now on the March US Consumer Price Index scheduled this Tuesday, with headline expected at 2.5% YoY vs. 1.7% in February and core expected at 1.6% YoY vs. 1.3% in February.

Major Support Levels: 

S1: 109.53 (20-DMA)

S2: 109.33 (21-EMA)

S3: 108.96 (200-DMA)

Major Resistance Levels: 

R1: 109.59 (5-DMA)

R2: 110.14 (200H MA)

R3: 110.96 (31st March high)

Summary: Technical studies do not provide a clear directional bias. Recovery lacks traction and downside finds strong support at 21-EMA. 

Major trend is bullish. Decisive break above 5-DMA will see further gains. On the flipside, break below 21-EMA will negate any bullish bias.