- USD/JPY extremely range bound in holiday-thinned trade today after spinning top formation seen on daily charts on Thursday.
- Risk-off dominates amid tensions in the Korean peninsula and over US bombing Afghanistan continue to spook markets. Yen likely to remain supported.
- The major finds strong support at 108.57 (converged 200-DMA and channel base).
- We see resumption of weakness on break below, test of 107.86 (61.8% Fib retrace of 101.19 to 118.662 rally) likely.
- RSI at oversold levels, so some caution advised. We see minor retracement if the pair manages a close above 5-DMA at 109.55.
- Break above 5-DMA could see minor retracements upto 20-DMA at 110.78.
- Weekly charts support downside in the pair. We have see a break below weekly 200-SMA which supports downside.
Support levels - 108.57 (converged 200-DMA and channel base), 107.86 (61.8% Fib), 107.77 (Nov 15, 2016 low)
Resistance levels - 109.55 (5-DMA), 110, 110.78 (20-DMA), 111.99 (38.2% Fib)
TIME TREND INDEX OB/OS INDEX
1H Neutral Neutral
4H Slightly bullish Neutral
1D Bearish Oversold
1W Bearish Neutral
Recommendation: Watchout for break below 200-DMA to go short, target 108/ 107.85
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -90.9419 (Bearish), while Hourly JPY Spot Index was at 83.8739 (Bullish) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.