FxWirePro: USD/JPY finds stiff resistance at 21-EMA, good to short rallies

• Markets unwind USD longs after a less hawkish FOMC outcome induced broad-based US dollar weakness.
   
• The Fed rose benchmark rate by 25bps as expected, but the dot-plot suggests only three rate hikes for this year, against four anticipated.
   
• USD/JPY is trading 0.14% lower on the day, currently hovering below 106 handle.
   
• Price has recovered from session lows at 105.57, as yen weaker after Japan manufacturing PMI falls to 9-month low in February.
   
• The major finds stiff resistance at 21-EMA at 106.56, we see upside only on decisive break above.
   
• Technical studies are bearish and we see scope for test of 78.6% Fib at 103.04.
   
• Focus now on US Jobless Claims and the Markit flash Composite PMI due later in the NY session.

Support levels - 105.55 (Feb 16 low), 105 (trendline), 104, 103.04 (78.6% Fib)

Resistance levels - 106.09 (5-DMA), 106.37 (61.8% Fib), 106.56 (21-EMA)

Recommendation: Good to go short on rallies around 105.90/106, SL: 106.60, TP: 105.55/ 105/ 104.

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -39.426 (Neutral), while Hourly JPY Spot Index was at -71.0646 (Neutral) at 0600 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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