FxWirePro: USD/JPY upside fails to hold break above 5-DMA, bias lower, stay short

• USD/JPY upside largely capped below 5-DMA at 113.57, US dollar remains on the defensive ahead of key US CPI data.
   
• US CPI is expected to come in at +0.1% m/m versus -0.1% seen last, while core figures are expected to rise to 0.2% versus 0.1% previous.
   
• Technical indicators on daily charts have turned bearish, RSI and Stochs have rolled over from overbought levels and MACD is on verge of bearish crossover.
   
• We see Doji formation which shows indecision and selling pressure on rallies.
   
• Immediate support is seen at 20-DMA at 112.63. Violation there could see downside upto 112.15 (38.2% Fib).
   
• Bearish invalidation likely on close above 5-DMA at 113.54, scope for test of 61.8% Fib at 114.63.
   

Support levels - 113, 112.63 (20-DMA), 112.15 (38.2% Fib retrace of 118.662 to 108.130 fall)

Resistance levels - 113.54 (5-DMA), 114, 114.63 (61.8% Fib)

Call update: We had advised a short in our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-recovery-capped-below-5-DMA-at-11360-bias-lower-good-to-short-rallies-801115).

Recommendation: Stay short

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -35.2096 (Neutral), while Hourly JPY Spot Index was at 49.9232 (Neutral) at 0915 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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