- USD/JPY was rejected at 20-DMA, breaks below 5-DMA at 109.26, intraday bias bearish.
- Rising risk-off is bolstering the demand for the safe-haven Yen, weighing on the USD/JPY pair.
- BoJ Governor Kuroda was out on the wires, said the central bank is watching market moves carefully.
- The BoJ can be expected to begin taking measures to weaken the Yen if market sentiment persists.
- Technically, the pair was capped at stiff resistance at 20-DMA and we see further upside only on break above.
- The pair now finds minor trendline support at 108.40, breach there could see 107.31 levels.
Support levels - 108.40 (trendline), 108.16 (88.6% Fib retrace of 107.318 to 114.737 rally), 107.31 (Sept 8 low)
Resistance levels - 108.90 (78.6% Fib), 109.28 (5-DMA), 110.01 (20-DMA)
Recommendation: Good to go short on rallies around 108.75/85, SL: 109.30, TP: 108.40/ 108.15/ 107.35.
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