- Persistent USD selling supported by sharp slide in UST yields, led by Wednesday's dovish FOMC meeting minutes, weigh on USD/JPY.
- The pair has slipped below 20-DMA at 112.35, bears struggling to extend break below 112 handle.
- Technical indicators lack directional strength, further weakness seen only on decisive break below 200-DMA at 111.80.
- RSI and Stochs are biased lower and MACD is showing a bearish crossover, but ADX does not support downside.
- Further the 'Bearish Cypher' pattern on daily charts keeps scope for downside in the pair.
- key CPI will be in focus after FOMC members showed concerns that the recent weakness in inflation may not just be transitory.
Support levels - 112, 111.80 (200-DMA), 111.10 (38.2% Fib retrace of 107.318 to 113.439 rally)
Resistance levels - 112.35 (20-DMA), 112.40 (5-DMA), 113, 113.43 (Oct 6 high)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-Bearish-Cypher-pattern-raises-scope-for-downside-in-USD-JPY-bias-lower-stay-short-942286) has hit TP1.
Recommendation: Book partial profits at lows. Watch out for break below 200-DMA for further downside.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -56.3273 (Neutral), while Hourly JPY Spot Index was at -99.4823 (Bearish) at 0400 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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