- USD/JPY has held major trendline support at 110 levels and edged higher.
- The pair has broken above 5-DMA at 111.08 and intraday bias remains neutral.
- During the recent bout of risk aversion in the financial markets, the S&P 500 VIX index rose from 10.9 to 15.1.
- However, the risk reset seen over the last few days saw the VIX tumble from 15.1 to 11.00.
- Decline in the VIX suggests the markets have not really lost confidence in the Trump Presidency.
- Stochs are on verge of a rollover from oversold levels and RSI has shown retrace from near oversold levels.
- We see scope for test of weekly 5-SMA at 112.80, breach there could see test of 50-DMA at 113.08.
- We see weakness only on break below trendline at 110 levels.
Support levels - 111.07 (5-DMA), 110 (trendline), 108.26 (200-DMA)
Resistance levels - 111.34 (1H 200-SMA), 112.12 (23.6% Fib retrace of 118.66 to 110.10 fall), 113
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 68.9912(Bullish), while Hourly JPY Spot Index was at -4.57506 (Neutral) at 0520 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
