- Persistent weakness in the greenback coupled with weaker market sentiment reinforces downside in USD/JPY.
- The pair has breached major trendline support at 108.40 to hit lowest since Nov 2016.
- Technical weakness persists. Scope then for test of 61.8% Fib retrace of 98.787 to 118.662 rally at 106.37.
- The pair is struggling to break below 108 handle, a decisive break through will likely accelerate the fall.
- With no major economic releases, the pair will continue to be influenced by any fresh news coming out of the ongoing N. Korean crisis.
Support levels - 108, 107.77 (Nov 15 2016 low), 107, 106.37 (61.8% Fib retrace of 98.787 to 118.662 rally)
Resistance levels - 108.40 (trendline support turned resistance), 108.72 (50% Fib), 108.85 (5-DMA), 109.46 (20-DMA)
Recommendation: Good to go short on rallies around 108.25/40, SL: 109, TP: 108/ 107.75/ 107/ 106.40
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -125.352 (Bearish), while Hourly JPY Spot Index was at -24.5977 (Neutral) at 0400 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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