FxWirePro: USD/JPY extends range trade, hovers around 5-DMA at 110.55, weakness likely on break below

• US dollar subdued against major peers for the second straight session, USD/JPY down 0.16% on the day.
   
• The major is extending corrective slide post NFP rally, hovers around 5-DMA at 110.55.
   
• Comments from the former BOJ Deputy Governor Iwata also continues to lend support to the Yen bulls.
   
• Iwata said earlier today that the BOJ should scale back ultra-massive stimulus program before inflation hits 2%.
   
• Technically, we see scope for further gains. Stochs are on verge of rollover from oversold levels, support upside on confirmation.
   
• In the US data docket today focus remains on JOLTS job openings and IBD/TIPP Economic Optimism for fresh impetus on the buck.
   
• The crucial US CPI report due Friday will be the next major risk event which will drive price action in the pair.

Support levels - 110, 109.40 (trendline), 109.27 (June 15 low)

Resistance levels - 111.07 (38.2% Fib retrace of 98.787 to 118.662 rally), 111.40 (20-DMA), 111.50 (50-DMA)

Call update: We had given a long call on the pair (http://www.econotimes.com/FxWirePro-USD-JPY-extends-post-NFP-rally-breaks-1H-200-SMA-good-to-go-long-on-dips-840077).

Recommendation: We uphold our previous call. Stay long.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 70.7826 (Neutral), while Hourly JPY Spot Index was at 118.66 (Bullish) at 1020 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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