FxWirePro: USD/JPY erases most of previous session's sharp recovery, ongoing N. Korean crisis continues to underpin yen

• USD/JPY down 0.26% on the day, erases most of previous session's sharp recovery.
   
• Ongoing crisis over North Korea continues to underpin the Japanese Yen's safe-haven demand.
   
• The three-month extension of the debt ceiling in the US buoyed the USD on Wednesday which saw broad based US dollar rebound. Also, reports of solid US non-manufacturing PMI added support.
   
• USD/JPY closed above 109 handle on Wednesday. The major has however slipped lower as the yen has regained the bid tone.
   
• Technical weakness persists. The pair is hovering strong trendline support at 108.40.
   
• Break below will see further weakness. Scope then for test of 61.8% Fib retrace of 98.787 to 118.662 rally at 106.37.

Support levels - 108.60 (Aug 18 lows), 108.40 (trendline), 106.38 (61.8% Fib retrace of 98.787 to 118.662 rally), 108.13 (April 17 low)

Resistance levels - 109, 109.53 (20-DMA), 110, 110.95 (Aug 16 high)

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -141.41 (Bearish), while Hourly JPY Spot Index was at -43.1439 (Neutral) at 1010 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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