- USD/JPY recovers from fresh lows hit last week, bias remains bearish as long as 5-DMA resistance holds.
- The major opened with a bullish gap and currently trades around 109 handle, having made a low of 108.51.
- Breakout above 5-DMA at 109.28 could see upside till 61.8% Fib at 110.15 and then 20-DMA at 111.06.
- Breakout at 20-DMA invalidates the bearish bias, scope then for test of 200-DMA at 111.73.
- Technical indicators and momentum studies still bearish with -ve DMI dominance.
- On the downside we see scope for test of 108.16 (88.6% Fib ahead of 107.31 (Sept 8 low).
- For the week ahead, eyes will be on nonfarm payrolls and the FOMC for further bias.
- Also watch out for meeting between BoJ, Japan Ministry of Finance and Financial Services Agency scheduled at 0730 GMT.
- Reuters quotes a Japanese government source, as citing the above meeting to discuss markets.
Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-channel-breach-raises-scope-for-further-downside-10816-next-bear-target-1114857) has hit TP1/2.
Recommendation: Book partial profits, trail stop loss to 109.30, hold for further downside.
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