- News that the US tax reform guidance would be announced by September 25 reignited optimism, providing additional boost to the US Dollar overnight.
- USD/JPY hit 4-week highs of 110.69 overnight and extended gains in early Asian session.
- The pair has since given up some of the gains to currently hover around 110.50.
- Upside saw stiff resistance at 50-DMA currently at 110.55. Breakout will see further upside.
- Focus now on US inflation data due later in the NY session for fresh clues over the timing of next Fed rate hike.
Support levels - 109.67 (5-DMA), 109.47 (20-DMA), 109 (23.6% Fib retrace of 114.49 to 107.31 fall), 108.40 (trendline support)
Resistance levels - 109.55 (50-DMA), 110, 110.95 (Weekly 20-SMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-confined-to-narrow-range-consolidates-overnight-surge-focus-on-US-inflation-data-for-further-impetus-893870) has hit all targets.
Recommendation: Book full profits at highs. Watch for breakout above 50-DMA to enter fresh longs. Target 110.95/ 111.20/ 111.60.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 92.9606 (Bullish), while Hourly JPY Spot Index was at -58.082 (Neutral) at 0400 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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