FxWirePro: USD/JPY extends recovery amid rebound in risk sentiment, retakes 55-EMA

USD/JPY chart on Trading View used for analysis

• USD/JPY trades largely muted on the day, holds above 5-DMA.
   
• The major bounced back from multi-week lows hit on Monday's trade as risk sentiment improved across markets.
   
• Major trend in the pair is bullish, bears struggling to extend drag below 55-EMA.
   
• Further recovery in global stocks can dent yen demand, pushing the pair higher. Breakout above 21-EMA could see resumption of uptrend. 
   
• Focus on FOMC minutes will likely provide important context for some of the decisions at the September meeting.
   
• Analysts at nomura expect the minutes for the September meeting to emphasize the Committee’s expectation of another rate hike in December, the fourth of 2018.
   
• Below 55-EMA finds next major support at 111.75 (major trendline support).
   
• On the flip side, break above 21-EMA eyes 113.17 (July 19th high) ahead of 114.55 (Oct 4th high)

Support levels - 112.04 (55-EMA), 111.75 (trendline), 110.76 (38.2% Fib)

Resistance levels - 112.58 (21-EMA), 113.17 (July 19th high), 114.55 (Oct 4th high)

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.