- USD/JPY pulled back from 2-month lows at 109.55, but 5-DMA at 110.33 weighs on the upside, intraday bias bearish.
- The pair is extending gradual grind lower. Price action is below daily cloud and major moving averages.
- We see major support at 109.50 (trendline). Break below required for further weakness.
- Momentum studies on weekly charts are bearish. RSI below 50 and biased lower.
- Break below 109.50 could accentuate weakness. Scope then for test of 107.40 levels.
- Focus on the release of US PPI print and weekly jobless claims for further direction.
Support levels - 109.50 (trendline), 109, 108.80 (June 14 low), 108.13 (Apr 17 low)
Resistance levels - 110, 110.32 (5-DMA), 111.06 (20-DMA)
Recommendation: Watchout for break below 109.50 to go short, SL: 110.35, TP: 109/ 108.80/ 108.15
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 54.9042 (Neutral), while Hourly JPY Spot Index was at 155.319 (Bullish) at 1020 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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