FxWirePro: USD/JPY breaks major trendline support at 105, hits new 14-month lows at 104.63

• Yen demand on the rise in Asia on heightened trade war angst as China lashes out against US.
   
• Reports suggest the Chinese are preparing a raft of duties on US goods targeting key exportation industries in the US economy.
   
• USD/JPY breaks major trendline support at 105, hits new 14-month lows at 104.63.
   
• Technical studies are bearish and we see scope for test of 78.6% Fib at 103.04.
   
• A less hawkish FOMC outcome is also expected to keep broad-based US dollar weakness.
   
• Immediate resistance is seen at 5-DMA 105.75, break above could see minor upside.
   
• Decisive breakout at 20-DMA at 106.22 will invalidate bearish bias.

Support levels - 104, 103.04 (78.6% Fib)

Resistance levels - 105.75 (5-DMA), 106, 106.22 (20-DMA), 106.37 (61.8% Fib)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-finds-stiff-resistance-at-21-EMA-good-to-short-rallies-1216051) has hit TP1/2.

Recommendation: Book partial profits at lows. Trail stop loss to 105.75, hold for further downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -123.665 (Bearish), while Hourly JPY Spot Index was at 177.193 (Bullish) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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