- USD/JPY consolidates previous session's slump, trades around the 112 handle after hitting session lows at 111.88.
- Japan Merchandise Trade Balance total came in at ¥285.4B, below expectations (¥330B) in October.
- Daily momentum indicators are heavily bearish pointing increasingly lower.
- Bears eye 200-DMA at 111.74, break below could accentuate weakness. Scope then for test of 111.46 weekly 20-SMA ahead of 111 levels.
- On the flipside, we see major resistance at 112.70 (converged 5 and 50-DMA). Upside only on break above.
- Going forward markets will remain concerned about the tax bill, Senate Finance Committee's vote is unlikely to take place until after Thanksgiving (23 Nov).
Support levels - 112.98 (23.6% Fib retrace of 107.318 to 114.73 rally), 112.48 (50-DMA), 111.90 (38.2% Fib)
Resistance levels - 113.45 (5-DMA), 113.63 (20-DMA), 114, 114.50 (trendline)
Recommendation: Good to go short on break below 200-DMA at 111.75, SL: 112.70, TP: 111.50/ 111/ 110.60.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest
