- USD/JPY is consolidating a close above 112 handle on Monday's trade.
- The major is trading in an extremely narrow range, with a day's high of 112.30 and low of 112.03.
- Upside lacks traction, we see 20-DMA at 112.40 acting as stiff resistance.
- 'Bearish Cypher' formation on daily charts keeps scope for downside.
- 200-DMA at 111.76 is offering strong support on the downside, break below will accentuate weakness.
- Scope then for test of 100-DMA at 111.14. Bearish invalidation seen on retrace above 20-DMA at 112.40.
- Focus now shifts towards the US dataflow and Fedspeaks for fresh impetus on the buck. News from N. Korea will also be watched.
Support levels - 112, 111.76 (200-DMA), 111.50 (Sept 26 low), 111.14 (100-DMA), 111
Resistance levels - 112.40 (20-DMA), 112.72 (Sept 21 high), 113
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 65.8508 (Neutral), while Hourly JPY Spot Index was at -13.2904 (Neutral) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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