- USD/JPY down 0.45 pct on the day, slips to 3-week lows at 112.08.
- Upside capped at 20-DMA at 112.68 and we see a bearish 5 and 20 DMA crossover.
- We see scope for further downside. Bears eye 200-DMA at 111.70. Violation there will see further downside.
- Bearish invalidation on close above 5-DMA at 112.74.
- Focus now on US import price index due at 12:30 GMT. Import prices are seen dropping 0.2% m/m in June, compared to a 0.3% drop in May.
- Focus this week also on the BoJ policy meeting, where the central bank is expected to leave monetary policy unchanged defying other central banks on rate hikes.
Support levels - 112, 111.70 (200-DMA), 111.45 (June 22 low), 111
Resistance levels - 112.68 (20-DMA), 112.74 (5-DMA), 113
Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-recovery-capped-below-5-DMA-at-11360-bias-lower-good-to-short-rallies-801115) has hit all targets.
Recommendation: Stay short for 200-DMA at 111.70. Watchout for violation at 200-DMA for further downside.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -130.553 (Bearish), while Hourly JPY Spot Index was at 8.74028 (Neutral) at 0300 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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