- USD/JPY fails to hold major trendline break, trades 0.25% lower on the day.
- US ADP report on private sector employment, followed by ISM non-manufacturing PMI will be closely watched for further impetus.
- Fedspeaks will also be watched for fresh insights on the US interest rates outlook. A more constructive outlook on the Fed's tightening path will keep the USD buoyed.
- Technical indicators on daily charts are still bullish, but 'Bearish Divergence' on RSI and Stochs raises scope for downside.
- Next major resistance seen at 114.32 (61.8% Fib retracement of 118.662 to 107.318 rally).
- 200-DMA at 111.955 is strong support on the downside, weakness likely on break below.
Support levels - 112, 111.955 (200-DMA), 111.65 (38.2% Fib retracement of 118.662 to 107.318 rally)
Resistance levels - 113, 113.25 (Sept 27th high), 114, 114.32 (61.8% Fib)
Recommendation: Good to go short on break below 5-DMA, target 111.95/ 111.65/ 111
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 24.4658 (Neutral), while Hourly JPY Spot Index was at 151.309 (Bullish) at 0840 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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