FxWirePro: USD/JPY erases gains, slips below 20-DMA, political uncertainty in Japan weighs

• Political uncertainty in Japan on Moritomo scandal news weighed on USD/JPY as Nikkei retraces gains.
   
• USD/JPY edges lower from session highs at 106.97, slips below 20-DMA at 106.65.
   
• The pair is currently trading at 106.45 levels, down 0.34% on the day.
   
• Investors await the Bank of Japan’s (BoJ) January monetary policy meeting minutes scheduled for Tuesday.
   
• Technical studies are turning bullish. RSI and Stochs are biased higher. 5-DMA has turned north.
   
• Decisive break above 20-DMA could see further upside. Scope then for test of 107.48 (23.6% Fib retrace of 114.737 to 105.250 fall).
   
• On the downside, break below 5-DMA at 106.32 could see test of 105.15 (major trendline support).

Support levels - 106.32 (5-DMA), 105.15 (trendline), 105

Resistance levels - 106.65 (20-DMA), 107, 107.48 (23.6% Fib)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-tests-20-DMA-bias-higher-good-to-go-long-on-dips-1193932) has hit TP1/2.

Recommendation: Book partial profits. Watch out for break above 20-DMA for further upside.

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