- The demand for the safe-haven Yen hit by easing trade war concerns after the US offered to negotiate with China.
- USD/JPY tests 107 handle before paring some gains to currently hover at 106.91 levels.
- Technical studies for the pair are bullishly aligned and bullish divergence on RSI and Stochs keeps scope for upside.
- We have seen last week that price action has broken strong trendline resistance at 106 levels.
- Upside currently finds immediate resistance at 107.01 (23.6% Fib retracement of 114.737 to 104.629 fall).
- Break above will test cloud base at 107.37 ahead of 38.2% Fib at 108.49.
- On the flipside 5-DMA at 106.49 is immediate support, we see minor weakness on break below.
Support levels - 106.49 (5-DMA), 106.17 (20-DMA), 106, 105.30 (trendline)
Resistance levels - 107.01 (23.6% Fib), 107.29 (March 13 high), 107.37 (cloud base)
Recommendation: Good to go long on dips around 106.75/85, SL: 106.40, TP: 107.25/ 107.40/ 107.75.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 47.6452 (Neutral), while Hourly JPY Spot Index was at -70.1414 (Neutral) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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