- USD/JPY extends retrace from multi-month lows at 104.62, breaks above strong resistance at 21-EMA.
- Upbeat US GDP data along with receding tensions between US and China over trade tariffs is also supporting the US dollar.
- US GDP exceeded expectations, came in at 2.7% versus 2.9% forecasted by analysts.
- Further, the PCE Index, preferred by the Federal Reserve, came in line with expectations at 2.9% for the fourth quarter of 2017.
- The pair is trading is now consolidating previous session's gains, is trading slightly lower on the day.
- Technical indicators are turning bullish, we see scope for further upside in the pair. Weakness likely to resume on close below 21-EMA.
Support levels - 106.26 (21-EMA), 106, 105.77 (5-DMA)
Resistance levels - 107, 107.66 (55-EMA), 109.97 (cloud base)
Recommendation: Good to go long on dips around 106.40/50, SL: 106, TP: 107/ 107.65/ 108
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 70.887 (Neutral), while Hourly JPY Spot Index was at -136.43 (Bearish) at 0610 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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