FxWirePro: USD/JPY breaks below 200-DMA, good to go short on rallies

• USD/JPY breaks below 200-day MA at 110.21 amid escalating trade tensions between US and China.
   
• U.S. President Donald Trump threatened on Monday to impose a 10 percent tariff on $200 billion of Chinese goods.
   
• The world's two biggest economies appear increasingly headed towards a full-fledged trade war keeping markets risk averse.
   
• The major is trading 0.79% lower on the day at around 109.68 at the time of writing.
   
• Upside in the pair was capped at major trendline resistance at 110.90 on Friday's trade.
   
• Further we evidence a Doji formation at highs which raises scope for weakness in the pair.
   
• Stochs are on verge of rollover from overbought territory and we see -ve DMI crossover on +ve DMI.
   
• Daily cloud offers strong support at 108.83. Violation there could see test of 38.2% Fib at 108.49.
   
• On the upside, the pair needs to break above major trendline resistance at 110.85 for further upside.

Support levels - 109.68 (50% Fib), 109.20 (June 8 low), 109

Resistance levels - 110.21 (200-DMA), 110.37 (5-DMA), 110.85 (trendline) 

Recommendation: Good to go short on upticks around 109.75/85, SL: 110.25, TP: 109.20/ 109/ 108.65

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 72.4078 (Neutral), while Hourly JPY Spot Index was at 74.6758 (Neutral) at 0845 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.