FxWirePro: USD/JPY breaks above 200-DMA, nears three-week high after poor Japan CPI, BOJ minutes

USD/JPY chart - Trading View 

Fundamental Overview:

USD/JPY is extending gains for the 3rd straight session, nears 3-week high above 109 handle.

The major was trading 0.86% higher on the day at 108.95, edging lower from session highs at 109.557.

Downbeat catalysts in the form of lower than expected Japan’s National Consumer Price Index and BOJ minutes favors further easing weigh on the yen.

Japan’s National Consumer Price Index (CPI) came in below 0.8% forecast On MoM to 0.4% whereas the CPI ex Food, Energy (YoY) slipped beneath 0.9% expectations to 0.6% for February.

BOJ minutes for the January month meeting offered additional support for the Japanese central bank’s Quantitative Easing (QE).

Technical Analysis:

USD/JPY near-term bias has turned bullish after pair breaks above 200-DMA.

GMMA shows short-term moving averages have turned bullish.

Momentum studies are bullish. RSI has edged above 50 and is biased higher.

Stiff resistance is seen at daily cloud and 200W SMA at 109.09 and 109.65 respectively.

Breakout at 200W SMA will fuel more upside. Gains till 111 then likely.

TIME  TREND INDEX  OB/OS INDEX  
1H          Bullish                Neutral       
4H          Bullish                Overbought       
1D          Bullish                Neutral        
1W         Neutral               Neutral      

Support levels - 108.59 (110-EMA), 108.23 (200-DMA)
Resistance levels - 109.09 (cloud top), 109.65 (200W SMA)

Summary: Major stimulus from the global central banks/governments is supporting broad based dollar strength. Though fears of the deadly virus continue to weigh on the markets’ risk-tone, near-term gains in the pair look likely on sustained close above 200W SMA.

Intraday Trade Idea: Stay long on dips around 108.35/40, SL: 107.25, TP: 109/ 109.60