FxWirePro: USD/JPY largely muted around 110 handle, awaits NFP data for further impetus

• ISM non-manufacturing index miss (Thursday) fueled speculations that the Fed could extend the pause in its tightening cycle over the next months.
   
• ISM non-manufacturing index came at 53.9 missing forecasts at 57.0 and below the 57.4 of the previous month.
   
• It was the lowest reading in 11 months and USD/JPY hit fresh 7-week lows at 109.86 after downbeat data.
   
• The pair was largely muted around 110 handle on the day, awaiting NFP data for further impetus.
   
• Market consensus expects an increase of 183K jobs during July. Any miss on expectations could weigh heavily on the greenback.
   
• Momentum studies are bearish on daily charts and we see scope for test of channel base at 109.30.
   
• Violation at channel base would open doors for a steeper slide towards 108.80 (June low).
   
• On the flipside, we see bearish invalidation only on close above weekly 200-SMA at 111.27.

Support levels - 109.30 (channel base), 109, 108.80 (June lows)

Resistance levels - 110.29 (5-DMA), 110.42 (weekly 50-SMA), 111.07 (38.2% Fib retrace of 98.787 to 118.662 rally), 111.27 (weekly 200-SMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-hits-fresh-6-week-lows-at-11030-geopolitical-tensions-keep-yen-buoyed-827929) has target 1.

Recommendation: Stay short.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 73.4154 (Neutral), while Hourly JPY Spot Index was at 77.1228 (Slightly bullish) at 1130 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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