FxWirePro: USD/JPY starts the week with a gap down open; US-China trade woes, news of fresh US sanctions on Iran and N. Korea weigh

USD/JPY chart - Trading View 

• USD/JPY opens the week's trade with a gap down open, bias has turned bearish.
   
• Greenback dented on renewed US-China trade woes and news of fresh US sanctions on Iran and N. Korea.
   
• Trump has threatened to slap a 25% tariff on a mind-boggling USD525 billion of Chinese goods by this Friday. 
   
• The pair has however, edged higher from 6-week lows at 110.28 after upbeat China's Caixin services PMI data.
   
• China's Caixin services PMI for April came in at 54.5 vs. 52.8 expected and 54.4 last. Composite Output Index eased slightly to 52.7 in April from March’s reading of 52.9.
   
• Japan remains on holiday this Monday, and thin markets could lead to unexpected moves across the board.
   
• Technical indicators have turned bearish on the daily charts. Stochs and RSI are sharply lower and MACD and DMI support downside.
   
• The major is currently holding support at daily cloud at 110.31. Break below will see drag till 38.2% Fib at 109.44.
   
• Cloud top offers immediate resistance at 110.81. Break above 200-DMA required for bearish invalidation.

Support levels - 110.31 (cloud base), 110, 109.44 (38.2% Fib)

Resistance levels - 110.81 (cloud top), 111, 111.19 (converged 5-DMA and 55-EMA)

Recommendation: Stay short on break below daily cloud, SL: 110.85, TP: 110/ 109.45

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