- USD/JPY was trading in a narrow range, hovers around the 107 handle.
- USD extends Friday's weakness after the non-farm payrolls miss, despite slightly improved wages.
- Poor data dampened Fed expectations and keep upside in the pair limited.
- Technically we see stiff resistance at daily cloud base currently at 107.22. We see upside only on decisive break into cloud.
- Technical indicators on daily charts are neutral to slightly bullish. Breakout at cloud base could see test of 38.2% Fib at 108.49.
- The pair finds strong support at 20-DMA at 106.23. We see bearish bias only on decisive break below.
- On the data front, focus shall be on US CPI and FOMC minutes due later this week for further impetus.
Support levels - 106.94 (5-DMA), 106.23 (20-DMA), 106
Resistance levels - 107.22 (cloud base), 108, 108.49 (38.2% Fib)
Recommendation: Watch out for break into daily cloud to go long.
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