FxWirePro: USD/JPY capped at 20-DMA, on track to test 200-DMA at 111.70, stay short

• USD/JPY down 0.45 pct on the day, slips to 3-week lows at 112.08.
   
• Upside capped at 20-DMA at 112.68 and we see a bearish 5 and 20 DMA crossover.
   
• We see scope for further downside. Bears eye 200-DMA at 111.70. Violation there will see further downside.
   
• Bearish invalidation on close above 5-DMA at 112.74.
   
• Focus now on US import price index due at 12:30 GMT. Import prices are seen dropping 0.2% m/m in June, compared to a 0.3% drop in May. 
   
• Focus this week also on the BoJ policy meeting, where the central bank is expected to leave monetary policy unchanged defying other central banks on rate hikes.
   

Support levels - 112, 111.70 (200-DMA), 111.45 (June 22 low), 111

Resistance levels - 112.68 (20-DMA), 112.74 (5-DMA), 113

Call update: Our previous call (http://www.econotimes.com/FxWirePro-USD-JPY-recovery-capped-below-5-DMA-at-11360-bias-lower-good-to-short-rallies-801115) has hit all targets.

Recommendation: Stay short for 200-DMA at 111.70. Watchout for violation at 200-DMA for further downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -130.553 (Bearish), while Hourly JPY Spot Index was at 8.74028 (Neutral) at 0300 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex. 

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest.