FxWirePro: USD/JPY rejected at lows, good to buy dips, weakness only on breaks below 120.66

• USD is garnering strength ahead of FOMC this week, USD/JPY better bid despite weakness across Asian stocks and a rather risk-averse sentiment across markets.
   
• Expectations are ripe for a Fed hike, but there is also the possibility of a dovish tone which could be bad news for the greenback. 
   
• USD/JPY had hit session lows at 120.63, but has then pared losses to retake the 121 handle and is currently trading at 121.27.
   
• Strong support is seen by cloud base at 120.66, breaks below could take the pair to 120.22 (61.8% Fib of 118.06 - 123.75 rise).
   
• 200 DMA at 121.58 is strong resistance on the upside which could cap upside in the pair, breaks above could see retracements to 122.30 levels.
   
• Daily Stochs show bullish crossover at oversold levels, RSI is also biased higher, scope for further gains.

Recommendation: We find it good to buy dips around 120.90, SL: 120.50, TP: 121.50

Resistance Levels:

R1: 121.58 (200-DMA)

R2: 121.86 (Dec 10 highs)

R3: 122.30 (channel base)

Support Levels: 

S1: 120.89 (50% Fib of 118.06 - 123.75 rise)

S2: 120.66 (cloud base)

S3: 120.22 (61.8% Fib of 118.06 - 123.75 rise)