FxWirePro: USD/JPY extends bounce off weekly low, break above daily cloud raises scope for further upside

USD/JPY chart - Trading View 

Spot Analysis:

USD/JPY was trading 0.18% higher on the day at 110.19 at around 04:20 GMT, bias bullish.

Previous Week's High/ Low: 110.26/ 109.41

Previous Session's High/ Low: 110.07/ 109.58

Fundamental Overview:

The dollar index (DXY) inched back from 4-week lows at 92.40 and was trading at 92.73 at the time of writing, as worries about slowing global growth weighed on traders' minds, boosting the dollar's safe-haven appeal.

On the data front on Tuesday, U.S. Conference Board (CB) consumer confidence index printed at 113.8, a six-month low.

On the other side, US S&P/Case-Shiller 20 n.s.a. house price index composite grew a record 19.1% in June. 

Market attention is now on U.S. payroll data due on Friday. Powell had said, an improvement in the labour market is one major remaining prerequisite for the Fed to taper its asset purchases.

Any disappointment in data could weigh on the dollar. 

Technical Analysis:

- USD/JPY has bounced off 5-day lows on Tuesday's trade

- A Hammer formation on Tuesday's candle raises scope for further upside

- Price action has broken above 21-EMA and daily cloud

- Momentum indicators have turned bullish, Stochs and RSI are biased higher

- Dips have held support at 200H MA, weakness only on break below

Major Support and Resistance Levels:

Support - 109.90 (21-EMA), Resistance - 110.35 (Trendline)

Summary: USD/JPY is on a winning streak for the 3rd consecutive week. Caution likely ahead of the crucial Non-Farm-Payrolls data. 

Technical studies show the pair is poised for further gains. Price action is now above 21-EMA and daily cloud. Major hurdle aligns at Symmetric Triangle top at 110.35. Decisive break above will propel the pair higher.