FxWirePro: USD/JPY rangebound above 110-EMA support, break below targets 200-DMA at 109.86

Refer USD/JPY chart on Trading View

• USD/JPY opened early Asian trade with a bullish gap, but failed to extend momentum higher.
   
• The major is trading largely unchanged on the day at 110.56 at the time of writing.
   
• Price action in within daily cloud with cloud base offering immediate support at 110.45.
   
• Upside remains minor resistance at 5-DMA at 110.76 and major resistance at 21-EMA at 111.03.
   
• Bullish divergence on Stochs keeps scope for minor upside. Only breakout at 21-EMA could see further gains.
   
• On the downside, break below 110-EMA support at 110.27 could see test of 200-DMA at 109.86.
   
• Violation at 200-DMA could see major downside. Scope then for test of 61.8% Fib at 107.89.
   
• Focus mainly on FOMC minutes (due Wednesday) which could provide additional information on participants’ concerns regarding US trade policy and the possible downside risks.
   
• On the data front focus shall be on: Existing home sales (Wednesday), Initial jobless claims (Thursday), New home sales (Thursday) and Durable goods orders (Friday).

Support levels - 110.45 (cloud base), 110.27 (110-EMA), 109.86 (200-DMA), 108.90 (50% Fib)

Resistance levels - 110.76 (5-DMA), 111.03 (21-EMA), 111.15 (23.6% Fib)

Recommendation: Watch out for break below 110-EMA, target 200-DMA

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -121.486 (Bearish), while Hourly JPY Spot Index was at 52.0667 (Neutral) at 0425 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.