FxWirePro: USD/JPY pauses downside at 109 handle, recovery lacks traction, upside capped at 5-DMA

USD/JPY chart - Trading View 

• USD/JPY pauses downside at 109 handle, edges higher as Japanese Yen loses steam on Trump's positive comments on China.
   
• The President reportedly said earlier today that he feels the negotiations with China will be successful.
   
• The major is tracking uptick in the S&P 500 futures, trades 0.27% higher on the day at 109.60 at 0430 GMT.
   
• Also, Bank of Japan's (BOJ) Kuroda was out on the wires a few minutes ago, reiterating the need to continue easing for a while.
   
• Gains likely to be short-lived as China's retaliation has reignited tit-for-tat trade war. Also technical studies do not support upside.
   
• Recovery lacks traction. Upside capped at 5-DMA. Break above finds next major resistance at 110.31 (cloud base).
   
• Break above cloud will see minor upside. Resumption of weakness will see test of 108.50 (Jan 31st low) ahead of 61.8% Fib at 107.61.

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