FxWirePro: USD/JPY on track to test support at 110.50, momentum heavily bearish

• USD/JPY extends lower after breaking strong trendline support at 112.95.
   
• Heavy bearish bias continues, test of 110.50 likely, breaks below could see 110 levels.
   
• BOJ March Tankan corporate price expectations survey showed that Japanese companies' long-term inflation expectations weakened in March from three months ago.
   
• Tankan report on Friday showed that business confidence among large manufacturers declined sharply from +12 in Q4 to +6 in Q1, reaching its lowest level since Q2 2013.
   
• Inflation expectations for three- and five-years ahead have never heightened since the survey began and are raising doubts over whether the BOJ’s stimulus measures are working.
   
• The pair unable to hold on to gains the back of a solid nonfarm payrolls report in the U.S. and a surprise positive in the ISM manufacturing in the same U.S. session.
   
• We see Doji formation on technical charts in the Asian session. Price action below daily cloud. Momentum studies bearish.
   
• Minor support is seen at 111.21 (Mar 21st lows). Breaks below to see test of 110.82 and then 110.50 (trendline support).
   
• On the upside resistance is seen at 112, 112.14 (5-DMA) and then 112.48 (10-DMA).
   
• Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-breaks-trendline-support-at-11295-good-to-sell-rallies-186205) has hit all targets.
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Recommendation: Hold for further downside, lower trailing stop to 112.20, target 110.82/110.50