FxWirePro: USD/JPY spikes above the 111 handle as Yen slumps on talks of possible delay in sales tax hike

• USD/JPY saw a robust recovery in early Asia as ongoing chatter that Japanese PM Abe is likely to delay sales tax hike plan by 2.5 years weighed heavily on the Yen.
   
• Yellen’s hawkish comments delivered last Friday increased June Fed hike bets and continue to support upside in the pair. 
   
• Upbeat Asian markets which rallied on positive risk-on sentiment also dented the Yen.
   
• USD/JPY hit multi-week highs above the 111 handle, but has since pared some gains to currently trade around 110.94.
   
• US markets remain closed on a Memorial Day holiday and traders likely to track sentiment across markets amidst low volumes.
   
• US payrolls data due later this week shall be a major risk event for the pair.
   
• On the technical side, the pair has broken its consolidation phase and has show a clear breakout above major resistance zone at 110.50-60.
   
• Technical indicators on weekly charts support upside in the pair, gains upto 111.80 likely. 
   
• Further bullishness could see test of 112 and then 113.30 (38..2% Fib of June 2015 to May 2016 fall).
   
• Upside finds resistance at 111.758 (double top Mar 18th and Apr 27th), 112 and the 113.30 (38.2% Fib).
   
• Supports are located at 110.41 (55-EMA), 110.34 (23.6% Fib) and then 110.20 (5-DMA).
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Recommendation: Go long on dips around 110.80/90, SL: 110.30, TP: 111.75/112/113/113.30