FxWirePro: USD/JPY extends range trade below 5-DMA at 112.52, bias lower

• USD/JPY spiked to session highs at 112.58 after FOMC minutes on Wednesday, but quickly faded the spike to close lower.
   
• FOMC minutes disappointed markets, didn't offer anything new. Fed officials saw another rate hike warranted later this year.
   
• Members agreed that they needed to be patient while assessing inflation and saw wages picking up amid strengthening labor market.
   
• Technical indicators lack directional strength, bias remains neutral to slightly bearish.
   
• The major is trading in an extremely narrow range, capped between 5 and 20 DMAs.
   
• RSI and Stochs are biased lower and MACD is showing a bearish crossover.
   
• Further the 'Bearish Cypher' pattern on daily charts adds scope for downside in the pair.
   
• Focus now on US CPI and retail sales data on Friday for further impetus in the pair.
   
• Decisive break below 20-DMA could see test of 38.2% Fibos at 111.10

Support levels - 112.29 (20-DMA), 112, 111.38 (cloud top), 111.10 (38.2% Fib retrace of 107.318 to 113.439 rally)

Resistance levels - 112.52 (5-DMA), 113, 113.43 (Oct 6 high)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-Bearish-Cypher-pattern-raises-scope-for-downside-in-USD-JPY-bias-lower-stay-short-942286) has hit TP1.

Recommendation: Bias lower, hold for further downside.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -132.28 (Bearish), while Hourly JPY Spot Index was at -119.66 (Bearish) at 0330 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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