FxWirePro: USD/JPY confined to narrow range, consolidates overnight surge, focus on US inflation data for further impetus

• USD/JPY hovers in narrow range around 20-DMA, after massive surge overnight.
   
• The greenback remained supported on receding worries over N. Korea and Hurricane Irma.
   
• USD/JPY spiked past 5-DMA and closed shy of stiff resistance at 20-DMA at 109.43 on Monday's trade.
   
• Bullish divergence keeps scope for upside. Technical studies have turned slightly bullish.
   
• Hourly cloud is strong support on the intraday charts, break below will see minor weakness.
   
• Close above 20-DMA at 109.37 raises scope for test of 100-DMA at 111.15.
   
• Key US inflation readings (due Thursday) will be in focus for fresh clues over the timing of next Fed rate hike move and eventually further direction in the pair.

Support levels - 109.37 (20-DMA), 109, 108.85 (5-DMA), 108.40 (trendline support)

Resistance levels - 109.58 (session high), 110, 110.64 (50-DMA)

Recommendation: Good to go long on close above 20-DMA, SL: 108.85, TP: 110, 110.65.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 38.9027 (Neutral), while Hourly JPY Spot Index was at -115.252 (Bearish) at 0530 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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