- USD/JPY breaks below weekly 200-SMA at 112.06, we see scope for further weakness.
- Price action hovers around weekly 20-SMA at 111.42, decisive close below for the week raises scope for more slumps.
- The major has been beaten down on the dovish FOMC minutes and is currently extending consolidation amid holiday-thinned trading.
- Momentum indicator is bearish in oversold territory, while the RSI gains traction downwards around 35, suggesting more weakness.
- The major is currently holding above 111 levels, we find minor support at 50% Fibo at 111.02.
- Break below will see resumption of downside, scope then for test of 61.8% Fib at 110.15.
- On the flipside, retrace above 200-DMA could invalidate our bearish bias.
Support levels - 111.42 (weekly 20-SMA), 111.02 (50% Fib retrace of 107.318 to 114.73 rally), 110.61 (July 24 low), 110.29 (100W-SMA), 110.15 (61.8% Fib)
Resistance levels - 111.70 (200-DMA), 111.78 (5-DMA),112.06 (weekly 200-SMA)
Recommendation: Good to stay short below 111, SL: 111.75, TP: 110.60/ 110.30/ 110.15
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -41.0363 (Neutral), while Hourly JPY Spot Index was at -55.7891 (Neutral) at 0400 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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