FxWirePro: USD/JPY recovers from 8-week lows at 112.52, bias lower

• USD/JPY edges higher from 8-week lows at 112.52 to retake the 113 handle.
   
• Yen largely ignored higher than expected manufacturing PMI data as risk-off dominated.
   
• Data released earlier today showed Japan’s Nikkei manufacturing PMI increases to 52.8 vs previous 52.4. 
   
• Japan’s January new export orders rise at quickest pace in over a year.
   
• Minor-recovery seen in the US dollar lacks traction. The pair hovers around 113 handle, bearish trend intact.
   
• Technicals on weekly charts support downside. Stochs are rolling over from overbought and MACD is on verge of a bearish crossover.
   
• We see scope for test of weekly 200-MA at 109.53. Bearish invalidation above weekly 5-MA at 115.20.
   
• Support levels - 112.52 (Session low), 112, 111.35 (Nov 28 low)
   
• Resistance levels - 113.97 (23.6% Fib retrace of 98.78 to 118.66 rally), 114, 114.85 (50-DMA)
   

Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-breaks-below-5-DMA-good-to-go-short-on-rallies-500189) has hit TP1. 
 

Recommendation: Hold for further downside.
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FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -111.153 (Highly bearish), while Hourly JPY Spot Index was at 100.53 (Highly bullish) at 0648 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.