- USD/JPY down 0.26% on the day, slips below 110 handle, bias neutral.
- The greenback remained under pressure and is extending FOMC minutes triggeed sell-off.
- US Dollar recovery move led by upbeat monthly retail sales data faltered after release of dismal housing starts.
- U.S. housing starts tumbled to an annualized pace of 1.155 million units in July, down 4.8% from 1.215 million units in the previous month.
- Further, FOMC minutes released on Wednesday showed members' concerns over the slowdown in inflation.
- Committee members argued that they needed to see more evidence of the inflation rising to the Fed's 2% target rate before deciding on the next rate hike.
- The pair has retraced from 38.2% Fib levels, hit session lows at 109.66 before paring some losses to currently trade at 109.86 levels.
- 20-DMA at 110.46 is strong resistance on the upside. Only decisive break above could see further gains.
- We see scope for test of 'Triple bottom' at 108.72 on close below 5-DMA at 109.90.
Support levels - 109.11 (June 7 lows), 109, 108.72 (triple bottom)
Resistance levels - 110.46 (20-DMA), 110.93 (38.2% Fib of 114.49 to 108.72 fall), 111.25 (100-DMA), 112.42 (200-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-bounces-off-lows-with-Morning-Star-formation-eyes-100-DMA-at-11128-stay-long-854960) has been stopped out .
Recommendation: Teshnicals indecisive, we prefer to wait for clear directional bias.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -6.4494 (Neutral), while Hourly JPY Spot Index was at 102.503 (Bullish) at 0420 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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