Refer USD/JPY chart on Trading View
- USD/JPY has hit 4-week lows at 109.77, before retracing brief dip below 200-DMA, retakes 110 handle.
- Markets perceiving the possibility of the Fed slowing down the pace of policy tightening in response to criticism from the White House weighing on the dollar.
- The 10-year treasury yield fell more than five basis points to 2.82 percent yesterday, sending the USD lower across the board.
- Technical indicators are biased bearish. RSI and Stochs are sharply lower. We see -ve DMI dominance and ADX is also rising in support of downtrend.
- Price action has dipped below daily cloud and has broken below 38.2% Fib. Decisive break below 200-DMA eyes 61.8% Fib at 107.89.
- On the flipside, 110.45 (converged cloud base & 5-DMA) is immediate resistance. Break above cloud could negate the bearish bias.
Support levels - 109.85 (200-DMA), 109.37 (June 25/26 low), 108.90 (50% Fib)
Resistance levels - 110.45 (converged cloud base & 5-DMA), 110.90 (21-EMA), 111.15 (23.6% Fib)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-rangebound-above-110-EMA-support-break-below-targets-200-DMA-at-10986-1417811) has achieved target.
Recommendation: Book partial profits at lows. Watch out for break below 200-DMA for further weakness. Target 109.40/ 109/ 108.90.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -134.594 (Bearish), while Hourly JPY Spot Index was at -83.0931 (Neutral) at 0330 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
