FxWirePro: USD/JPY ignores higher UST yields, plunges on Bullard's bearish comments, good to go short on upticks

• USD/JPY opens the week on a bearish note, trades 0.46% lower in the Asian session.
   
• The major ignored higher UST yields and extended declines on bearish comments from Fed's Bullard.
   
• Bullard said that the Fed should hold off on hiking further, as the shrinking yield curve is a bearish sign for the economy. 
   
• Last week, US president voiced dissatisfaction with the current pace of Fed rate hikes and strongly hinted that he would prefer a slower and lower creep-up of interest rates.
   
• The pair has broken below 20-DMA and 23.6% Fib to hit 2-week lows of 110.75 before paring some losses to currently trade at 110.93.
   
• Technical studies also support downside. Bearish divergence and rollover of momentum indicators from overbought levels support our bearish conviction.
   
• Bears now target 50-DMA at 110.51, break below will see test of 200-DMA at 110.10.
   
• 5-DMA at 112.10 is immediate resistance. 200W SMA at 113.24 is major resistance and we see further upside only on break above.
   
• For the week, focus will be on Japan inflation for July and US GDP index for Q2 for impact on price action. 

Support levels - 110.51 (50-DMA), 110.10 (200-DMA), 109.90 (cloud and 38.2% Fib)

Resistance levels - 111.15 (23.6% Fib), 111.30 (20-DMA), 112.10 (5-DMA)

Recommendation: Good to go short around 111, SL: 111.60, TP: 110.50/ 110.10

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -49.4946 (Neutral), while Hourly JPY Spot Index was at 93.4585 (Bullish) at 0300 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.