FxWirePro: USD/JPY struggles to extend gap-up open, focus on U.S. ISM manufacturing data for impetus

USD/JPY chart - Trading View 

USD/JPY opened the week's trade with a bullish gap open on improving risk sentiment.

Hopes of averting U.S-China near-term trade escalation and U.S. and Korea improved relations keep sentiment buoyed.

The major is since struggling to extend gains. Price action has slipped from session highs at 108.51 and is currently trading at 108.28 at 04:15 GMT.

Technical indicators on the daily charts support upside. Stochs and RSI are biased higher. 

Further, a bullish divergence on Stochs and RSI keeps scope for upside. A Bullish MACD crossover on signal line adds to the bullish bias.

Decisive close above 21-EMA required for further gains. Next bull target lies at 55-EMA at 109.16.

Major trend is bearish. Failure tp close above 21-EMA and retrace below 5-DMA will see resumption od weakness.

​Focus on U.S. ISM manufacturing data due later today for impetus ahead of the crucial NFP data later this week.

Support levels - 108.20 (21-EMA), 107.78 (5-DMA), 107.14 (Lower BB)

Resistance levels - 109, 109.16 (55-EMA), 109.89 (110--EMA)

Recommendation: Watch out for close above 21-EMA to go long, target 109.15.

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