- USD/JPY recovery capped at 100-DMA, slips lower to hit fresh 2-month lows at 110.84.
- The pair trades with a bearish momentum, break below 111 handle could see further downside.
- Technical studies are weak, RSI gaining traction downwards around 35, suggesting more weakness.
- Price has slipped below weekly 20-SMA at 111.38, raises scope for test of 61.8% Fib at 110.15.
- The major has been beaten down below 200-DMA on the dovish FOMC minutes and poor data.
- Immediate resistance lies at 5-DMA at 111.23 and retrace above 200-DMA at 111.68 could invalidate our bearish bias.
Support levels - 111.02 (50% Fib retrace of 107.318 to 114.73 rally), 110.61 (July 24 low), 110.20 (100W-SMA), 110.15 (61.8% Fib)
Resistance levels - 111.23 (5-DMA), 111.68 (200-DMA), 112.11 (weekly 200-SMA)
Recommendation: Good to stay short on decisive break below 111, SL: 111.75, TP: 110.60/ 110.30/ 110.15
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -45.8328 (Neutral), while Hourly JPY Spot Index was at 65.3015 (Neutral) at 0340 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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