- USD/JPY declined on Monday as U.S. political woes and lukewarm economic data pushed the dollar to multi-year lows and dampened expectations of another Federal Reserve rate hike this year.
- Data on Friday showed growth in the world's largest economy picked up in the second quarter, but labour costs rose less than expected, stoking concerns that inflation will remain low.
- Investors will keep a keen eye on second quarter labour data due on Wednesday. A weak report will likely add more pressure on the greenback.
- The pair remains under bears control unless until it trades below 111.86 resistance level, therefore it is good to sell this pair on rallies.
- To the upside, immediate resistance can be seen at 111.02, a break above this level would take the pair towards next resistance level at 111.33.
- To the downside immediate support can be seen at 110.21, a break below this level will open the door towards next level at 109.69.
Resistance Levels
R1: 111.02 (50% Retracement Level)
R2: 111.33 (July 28th high)
R3: 111.86 (61.8% Retracement Level)
Support Levels
S1: 110.21 (38.2% Retracement Level)
S2: 109.69 (June 13th lows)
S3: 109.18 (23.6% Retracement Level)
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