- USD/JPY comatose around 5-DMA at 109.14, hits session highs at 109.18 and lows at 109.02.
- Price action holds above 109 handle and finds strong support at 1H 110-EMA at 108.94. We see weakness only on break below.
- US flash Q1 GDP figures surprised to the upside on Friday, showed the economy is expanding at an annualized 2.3%.
- US economic growth has been picking up at a noticeable pace as evidenced by indicators, thereby propping up the likelihood of further rate hikes.
- Japanese markets remain closed for long weekend on account of Showa holiday. Focus now US Core Personal Consumption Index data later in the NY session for further impetus.
- Technical studies are also biased higher. We see scope for test of 200-DMA at 110.22.
- Break below 108.94 will see minor weakness. Bullish invalidation likely below 20-DMA at 107.68.
Support levels - 108.94 (1H 110-EMA), 108.84 (100-DMA), 108.49 (38.2% Fib), 107.71 (55-DMA)
Resistance levels - 109.68 (50% Fib), 110, 110.22 (200-DMA), 110.87 (61.8% Fib)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-struggles-to-hold-above-109-handle-minor-weakness-likely-on-retrace-below-110-EMA-1272606) has hit TP1.
Recommendation: Hold for further upside.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 1.42986 (Neutral), while Hourly JPY Spot Index was at 79.2436 (Neutral) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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