- Despite weak IP data from Japan, USD/JPY hits fresh 6-week lows as geopolitical tensions keep yen buoyed.
- US dollar subdued after a disappointment in the GDP data from the US last Friday.
- BoJ minutes last week showed that majority of members agreed that there is a need to keep the policy easy as the 2% inflation target is still distant.
- Price has broken below 38.2% Fib retrace of 98.787 to 118.662 rally at 111.07. Intraday bias is bearish.
- We see the next major support at weekly 50-SMA at 110.42, decisive break below will see test of 109.25 (channel base).
- Bearish invalidation only on decisive breakout above weekly 20-DMA at 111.26.
Support levels - 110.42 (weekly 50-SMA), 110, 109.30 (channel base)
Resistance levels - 111.11 (5-DMA), 111.61 (50-DMA), 112.03 (200-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-Possible-Death-Cross-on-USD-JPY-go-short-on-decisive-close-below-200-DMA-815003) has almost hit all targets.
Recommendation: Book full profits at lows. Watch out for decisive below 110.42 to go short. Targets 110/ 109.30.
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