FxWirePro: USD/JPY below 200-DMA on heightened North Korea tensions, more slumps on cards, stay short

• USD/JPY hits a 5-month low of 108.12 on Monday as yen remains bid on heightened North Korea tensions.
   
• Tense standoff between the US and North Korea continues despite North Korea’s failed missile launch.
   
• Risk-off tone could worsen as the week progresses, keeping safe-haven assets well in demand.
   
• USD/JPY dips below the 200-DMA for the first time since November 11, we see more downside.
   
• Dismal US CPI reading along with lower-than-expected US retail sales last Friday add to weakness in the pair.
   
• Price is moving with a clear bearish trend with next major support seen around 106.38 (61.8% Fib).

Support levels - 108, 107.77 (Nov 15 low), 107, 106.73 (Nov 14 low)

Resistance levels - 108.72 (50% Fib retrace of 98.78 to 118.66 rally), 108.91 (5-DMA), 110

TIME  TREND INDEX  OB/OS INDEX    

1H          Slightly bullish     Neutral       
4H          Bearish               Oversold        
1D          Bearish               Oversold        
1W         Bearish               Neutral      

Call update: We had advised a short in our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-holds-200-DMA-support-weakness-only-on-break-below-644096).

Recommendation: Bias lower, stay short, hold for targets.