FxWirePro: USD/JPY pares previous sessions' gains, holds support at 113 handle, break below could see further weakness

USD/JPY chart on Trading View used for analysis

• USD/JPY has erased some of the previous session's gains, trades 0.22% lower at 113.07 at the time of writing.
   
• News that Trump is fearing impeachment when Democrats take over the House denting the US dollar.
   
• Bears also derive support from cautious markets amid Brexit uncertainty and the US-China trade spat.
   
• The major has formed a 'Bearish Butterfly' pattern on the hourly charts and price has broken below 1H 200 SMA.
   
• Break below 113 handle could see extension of weakness. Dip till 55-EMA at 112.87 then likely. Breach at 55-EMA could see drag till 110-EMA at 112.24.
   
• On the data front we await US Producer Price Index (PPI) for the month of November due later in the NY session.

Support levels - 112.98 (5-DMA), 112.87 (55-EMA), 112.24 (110-EMA)

Resistance levels - 113.09 (1H 200-SMA), 113.15 (21-EMA), 113.96 (Upper BB)

Recommendation: Stay short on break below 5-DMA, target 112.85/ 112.55/ 112.40

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.