FxWirePro: USD/JPY shows sluggish recovery in holiday-thinned markets, 200-DMA offers strong support

USD/JPY chart on Trading View used for analysis

• USD/JPY is showing a sluggish recovery in the Asian trade today, trades 0.09% higher on the day at 111.10 at the time of writing.
   
• The major has found major support at 200-DMA and we see weakness only on break below.
   
• Momentum indicators are strongly bearish and we do not see major signs of reversal.
   
• Stochs are at oversold territory and price action has been raging outside the Lower BB. We could see minor bounce at current levels.
   
• That said, a far less hawkish Fed and a flight to safety as global stocks extend downside will continue to support downside.
   
• Decisive break below 200-DMA will see next major support at 110.30 (Lower BB) and the 109.59 (50% Fib).
   
• Bounce off 200-DMA could see upside till 21-EMA at 112.60. Bearish invalidation likely above 113.80 (Triangle top).

Support levels - 110.92 (200-DMA), 110.30 (Lower BB), 109.59 (50% Fib)

Resistance levels - 111.71 (5-DMA), 112, 112.20 (23.6% Fib)

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.