- USD/JPY on Thursday erased lower-than-expected US CPI reading led losses, spiked higher to hit 6-week highs at 112.06.
- Bulls struggling at the time of writing, retrace below 112 handle to currently trade at 111.84.
- Technical studies are biased higher. Momentum indicators are bullish, RSI holds above 50 mark.
- Price action is above major EMAs and has broken strong resistance at 111.65.
- We see scope for test of 78.6% Fib on close above the 112 handle. The pair could take out 113.17 on further bullishness.
- On the flip side, break below 100-DMA will negate bullish bias.
- Focus now turns towards the US retail sales, industrial production and prelim UoM consumer sentiment data for fresh impetus.
Support levels - 111.55 (5-DMA), 111, 110.87 (61.8% Fib)
Resistance levels - 112.57 (78.6% Fib), 113, 113.17 (July 19 high)
Recommendation: Good to go long on close above 112, SL: 111.50, TP: 112.55/ 113/ 113.15
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -92.1325 (Bearish), while Hourly JPY Spot Index was at -124.812 (Bearish) at 0515 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
