FxWirePro: USD/JPY upside pauses at 23.6% Fib, break above targets 100-DMA at 111.16

• USD/JPY buoyed on improved risk sentiment and strong US economic data.
   
• The pair has closed above 20-DMA, and bullish divergence keeps scope for upside.
   
• U.S. Q2 GDP rose 3.0% annualized vs 2.7% expected, and 2.6% previous in its second estimate.
   
• ADP employment rose 237k in August vs 185k expected and boosted expectations of positive nonfarm payrolls report.
   
• The yen remains subdued on the back of lower than expected industrial production data and abating risk-off in the markets.
   
• Japan July industrial output prelim mm decrease to -0.8 % (forecast -0.5 %) vs previous 2.2 %. Japan September IP forecast 2 month ahead decreases to -3.1 % vs previous 3.6 %.
   
• Upside has paused at 110.61 (23.6% Fib retrace of 118.662 to 108.130 fall). Break above finds next resistance at 100-DMA at 111.16. 
   
• Cloud on weekly charts is offering strong support, we see weakness on close below.

Support levels - 110, 109.80 (nearly converged 5&20 DMA), 109, 108.80 (June 14 lows)

Resistance levels - 110.61 (23.6% Fib), 110.95 (Aug 16 high), 111.16 (100-DMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-breaks-above-20-DMA-bullish-divergence-raises-scope-for-upside-874385) has hit TP1&2.

Recommendation: Book partial profits, raise stops to 109.80, hold for 111/ 111.15.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 81.4605 (Slightly bullish), while Hourly JPY Spot Index was at -114.486 (Bearish) at 0410 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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