FxWirePro: USD/JPY slumps below 200W SMA at 112.48, eyes 61.8% Fib at 110.15

• USD/JPY saw major downside on Wednesday following Tuesday’s reduction in JGBs purchases by the BoJ.
   
• Also, reports that China (world's largest treasury buyer) may cut its purchases of new US government bonds weighed on the greenback.
   
• Markets will be closely watching the BoJ next week for messages on yield curve control.
   
• Technically, the pair is trading with a bearish bias. Indicators on daily charts support more downside.
   
• The pair has broken major supports and is currently hovering around 111.55. Upside capped at 200-DMA at 111.69.
   
• The pair has breached 200W SMA support at 112.48 and price action has dipped into weekly cloud.
   
• We see next major support at 110.84 (Nov 27 low) ahead of 110.15 (61.8% Fib).

Support levels - 111, 110.84 (Nov 27 low), 110.15 (61.8% Fib retrace of 107.318 to 114.737 rally).

Resistance levels - 111.69 (200-DMA), 112, 112.34 (5-DMA), 112.48 (200W SMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-capped-below-50-DMA-at-11281-on-track-to-test-200-DMA-good-to-go-short-below-11215-1089887) has hit all targets.

Recommendation: Book partial profits at lows, trail stop loss to 111.69, stay short for 111/ 110.85/ 110.20.

Fresh shorts also recommended on rallies around 111.60, SL: 112, TP: 111/ 110.85/ 110.20.

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