FxWirePro: USD/JPY hits 15-week low at 110.81, break below strong support at 110.80 required for resumption of weakness

USD/JPY chart on Trading View used for analysis

• USD/JPY slumped on Thursday to hit 15-week lows at 110.81, bias remains bearish.
   
• The pair finds strong support at 110.80 (nearly converged 200-DMA and trendline). Break below to see further downside.
   
• Risk-off action on the Wall Street overnight extends into Asia keeping recovery in the pair limited.
   
• Downbeat U.S. data overnight also adding pressure. The Philadelphia Fed's manufacturing index unexpectedly fell in December.
   
• The Philly Fed index printed at a reading of 9.4 from 12.9 in November. The consensus forecast had been for a reading of 15.6.  
   
• Treasury yields remain low and it will be difficult for the dollar to sustain its gains if yields continue to fall.

Support levels - 110.90 (200-DMA), 110.76 (38.2% Fib), 109.77 (Aug 21 low)

Resistance levels - 112.08 (5-DMA), 112.20 (23.6% Fib)

Call update: Our previous call (FxWirePro: USD/JPY extends weakness despite hawkish Fed, risk-off to aid further declines) has almost hit all targets.

Recommendation: Book partial profits at lows. Watch out for break below 110.80 for further weakness.

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.