FxWirePro: USD/JPY struggles at 50-DMA amid wide spread risk-off, BOJ in focus

Technical Analysis:

• USD/JPY struggles to extend gains above 50-DMA currently at 115.03.
• Risk-off across markets fuel yen demand keeping the pair subdued.
• Stiff resistance on the upside, price action capped within daily cloud.
• Currently the pair is holding above 5-DMA support, break below will see further drag.
   

Fundamental Factors:

• The Japanese yen in demand today as risk-off prevails across markets after Trump's shocker on Friday.
• Trump’s travel bans stoked fears over global political turmoil and curbed the demand for risky assets.
• Trump’s immigration policy fuelled concerns over his protectionist policies and its impact on global trade. 
• Yen largely ignored today's Japan’s retail sales data miss. Japan’s December retail sales y/y decreased to 0.6 % (forecast 1.3 %) vs previous 1.7 %.
• Focus now remains on the Bank of Japan meeting (Tuesday) to provide fresh impetus on the yen.
• Major data lined up for this week include - US core PCE price index data, followed by the FOMC decision, China manufacturing PMI and US payrolls.
   

Support levels - 114.24 (5-DMA), 113.97 (23.6% Fib retrace of 98.787 to 118.662 rise), 113.04 (double bottom Jan 25,26)
 

Resistance levels - 114.91 (20-DMA), 115.03 (50-DMA), 115.13 (cloud top)
 

TIME  TREND INDEX  OB/OS INDEX    
 

1H          Bullish               Neutral       
    
4H          Neutral              Neutral       

1D          Neutral              Neutral        

1W         Bullish               Neutral  
 

Recommendation: Short break below 5-DMA at 114.24, SL: 115.10, TP: 113.62/ 113/ 112.60

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 23.5674(Neutral), while Hourly JPY Spot Index was at -118.973(Highly bearish) at 0625 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.