FxWirePro: USD/JPY finds major support at 109.87 (100W SMA), break below to accentuate weakness

• USD/JPY hits 19-week low of 109.80 as USD sell-off continues across the board and treasury yields retreat from multi-year highs.
   
• Concerns that Sino-US trade row may escalate if communication between US and China breaks down keeps pressure on USD.
   
• Further, strong Japanese data adds support to the Japanese Yen weighing further on the major.
   
• Japan January Nikkei manufacturing PMI flash increased to 54.4 compared to 54 in the previous month.
   
• Technical indicators are bearish. The pair has broken major trendline support at 110.15 and has slipped below 61.8% Fibo.
   
• We see -ve DMI dominance and ADX is rising in support or trend lower.
   
• We see major support at 100W SMA at 109.87, break below will accentuate weakness.

Support levels - 109.87 (100W SMA), 109.54 (Sept 19 low), 109, 108.90 (78.6% Fib)

Resistance levels - 110.15 (61.8% Fib retrace of 107.318 to 114.737 rally), 110.60 (5-DMA), 111.02 (50% Fib) 111.48 (Jan 18 high)

Recommendation: Good to go short on rallies around 109.95/110.10, SL: 110.60, TP: 109.55/ 109/ 108.90.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -136.122 (Bearish), while Hourly JPY Spot Index was at 71.5062 (Neutral) at 0500 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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