FxWirePro: USD/JPY struggles to hold break above 200-DMA, 'Bearish Cypher' pattern keeps scope for downside

• USD/JPY edges lower from 3 1/2 month highs at 110.45, trades 0.15% lower on the day at 110.18 levels.
   
• Markets largely ignored weaker Japanese Q1 GDP data, USD subdued on modest retracement in the US bond yields.
   
• Japan's first-quarter gross domestic product (GDP) contracted at an annualized rate of 0.6 percent as private consumption and capital expenditure (capex) slowed.
   
• Q1 GDP missed expectations for a 0.2 percent contraction and compared to a downwardly revised 0.6 percent annualized rate of expansion in Q4.
   
• The major is struggling to hold gains above 200-DMA, retrace below will see further downside.
   
• Technical studies still support upside in the pair. That said, bearish divergence and 'Cypher Pattern' on daily charts keeps scope for downside. 
   
• Decisive close above 200-DMA raises scope for test of 61.8% Fib at 110.87 on bullish momentum. 
   
• 20-DMA is strong support at 109.21 levels. Break below to see further weakness.

Support levels - 110, 109.78 (5-DMA), 109.21 (20-DMA)

Resistance levels - 110.87 (61.8% Fib), 111, 111.48 (Jan 18 high)

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 98.6556 (Bullish), while Hourly JPY Spot Index was at 11.8579 (Neutral) at 0945 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex. 

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