- USD/JPY extends grind lower, hovers around 200-DMA at 111.822. Possible 'Death Cross' on daily charts adds scope for downside.
- A decisive close below 200-DMA could see extension of weakness.
- Consecutive spinning top and doji formations on daily candles suggests some consolidation.
- A fresh wave of greenback selling pressure has been one of the key factors weighing on the major.
- Risk-off, as depicted by weaker global equity markets was also seen lending support to the Japanese Yen's safe-haven appeal.
- We see weakness only on break below 200-DMA support, test of 110.95 (June 22 low) then likely.
- On the flipside, breakout above 20-DMA could see bearish invalidation.
Support levels - 111.25 (cloud top), 111, 110.95 (June 22 low)
Resistance levels - 112.04 (5-DMA), 112.70 (20-DMA), 113
Recommendation: Good to go short on decisive close below 200-DMA, SL: 112.70, TP: 111.25/ 111/ 110.25
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -74.5764 (Neutral), while Hourly JPY Spot Index was at -44.9826 (Neutral) at 0900 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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