FxWirePro: USD/JPY trades narrow range, weakness on break below daily cloud

• USD/JPY was rejected at major trendline resistance at 115.50 on Friday's trade.
   
• The pair is trading in an extremely narrow range in the Asian session today.
   
• Strong support is seen at 114.55 which is cloud base and 5-DMA. Break below could see drag upto 113.97 (50-DMA).
   
• Data in early Asia today showed Japan’s core machinery orders saw biggest fall in 8 months.
   
• Japan’s January machinery orders m/m decrease to -3.2 % (forecast 0.5 %) vs previous 6.7 %, decrease to -8.2 %  y/y (forecast -3.3 %) vs previous 6.7 %.
   
• After upbeat U.S. NFP data markets fully priced in for a Fed hike on 15 March, but the main question now is over the pace of tightening thereafter. 
   
• U.S. debt ceiling that expires on March 16 is another major concern, which could favour Yen demand.
   
• If the Democrats are unable to reach a quick agreement to extend the ceiling, the Trump 'fiscal-policy-trade' could come into jeopardy.
   
• Focus now remains on Tuesday’s Chinese data dump and Wednesday’s FOMC decision for further impetus on the dollar-yen pair.

Support levels - 114.54 (5-DMA, 1H 100-SMA & cloud base), 113.96 (50-DMA), 113.55 (Mar 6 low)

Resistance levels - 115, 115.50 (Mar 10 high), 115.96 (61.8% Fib retrace of 118.66 to 111.59 fall)

TIME  TREND INDEX  OB/OS INDEX    

1H          Bearish               Neutral       
4H          Bearish               Neutral       
1D          Bullish                Neutral        
1W         Neutral                Neutral    
 
Recommendation: Short break below 114.50, SL: 115, TP: 114/ 113.60

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -90.8548(Bearish), while Hourly JPY Spot Index was at -46.8744 (Neutral) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.