FxWirePro: USD/JPY Daily Outlook

Chart - Courtesy Trading View 

USD/JPY was trading largely unchanged at 134.86 at around 04:20 GMT, down from session highs at 135.44.

DXY is underperforming despite the hawkish comments from Federal Reserve (Fed) policymakers.

Focus will remain on the Purchase Managers Index (PMI numbers from the US for further impetus. 

US Services PMI is seen extremely lower at 49.1 against the prior print of 53.2. While US Manufacturing PMI is expected to slip to 54.7 from the former figure of 55.7. 

Technical Analysis:

- Bearish RSI divergence and overbought oscillators keep scope for pullback

- GMMA indicator shows major and minor trend are bullish, pullbacks are likely to be shallow

- Price action is above major moving averages and daily cloud

- The pair has bounced off 21-EMA which is strong support at 132.12, weakness only on break below

Major Support Levels: 134.23 (5-DMA), 132.12 (21-EMA), 134.23 (50-DMA)

Major Resistance Levels: 136 (Trendline), 137, 137.50 (Upper BB)

Summary: USD/JPY is struggling to extend previous session's gains. Major trend remains bullish. Bullish invalidation only below 21-EMA.