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FxWirePro: USD/JPY slips below 20-DMA after bearish gap open, Yen bid amid widespread risk-aversion

  • Yen remains bid as risk-off persists triggered by the weekend’s hydrogen bomb test conducted by North Korea.
     
  • USD/JPY has opened with a bearish gap and is extending downside to slip below 20-DMA support at 109.68.
     
  • Also, disappointing US labour market report (Fri) which dented Dec Fed rate hike keeps sentiment around the US dollar sour.
     
  • US markets remain closed on account of Labour Day this Monday and price action will continue to be driven by risk sentiment.
     
  • We see weakness on intraday charts. Strong support seen at channel base at 108.70.
     
  • Bullish divergence keeps scope for upside. Cloud on weekly charts is offering strong support, we see weakness on close below.

Support levels - 109, 108.80 (June 14 lows), 108.60 (Aug 18 lows)

Resistance levels - 110 (5-DMA), 110.61 (23.6% Fib), 110.95 (Aug 16 high)

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