- US dollar regained poise overnight amid higher Treasury yields and better US industrial figures.
- Broad-based US dollar rebound along with slide of the yen amid rising equity prices on Wall Street sent USD/JPY soaring higher.
- The pair erased losses, edged higher from fresh 4-month lows at 110.19 to close 111.26.
- Price action broke above 5-DMA and is now on track to test 200-DMA at 111.71.
- Bank of Japan (BOJ) officials believe the ultra-easy monetary policy is needed for now and are of the opinion that the markets have run ahead of themselves.
- USD could remain well bid as the Fed's Beige book (released yesterday) is said to have opened doors for a March rate hike.
- Technical studies on intraday charts are turning bullish. We see scope for further upside.
Support levels - 111, 110.92 (5-DMA), 110.15 (61.8% Fib retrace of 107.318 to 114.737 rally)
Resistance levels - 111.54 (4H 50-SMA), 111.71 (200-DMA), 112, 112.23 (20-DMA)
Recommendation: Good to go long on breakout above 4H 50-SMA, SL: 111, TP: 111.70/ 112/ 112.20
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 67.1371 (Neutral), while Hourly JPY Spot Index was at -130.345 (Bearish) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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