- USD/JPY hovers around 114 handle, finds stiff resistance at 114.40 (major trendline).
- The pair has edged higher from session lows, 5-DMA at 113.73 offers strong support.
- Break below 5-DMA could see test of 20-DMA at 113.06, weakness only on break below.
- Increasing likelihood of Jerome Powell being nominated as the next Fed chair weighing on the dollar.
- Focus now on US tax-cut plans and Trump's announcement over the next Fed Chair.
- Friday's NFP will also be watched to determine the pair's next leg of directional move.
- Technical studies support upside. 'Golden Cross' formation on daily charts adds upside bias.
Support levels - 113.73 (5-DMA), 113.06 (20-DMA), 112.76 (23.6% Fib retrace of 107.31 to 114.45 rally)
Resistance levels - 114.40 (trendline), 114.45 (Oct 27 high), 115
Recommendation: Watch out for break above 114.40 to go long.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -80.6111 (Bearish), while Hourly JPY Spot Index was at -97.2363 (Bearish) at 1030 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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