- USD/JPY has bounced off major trendline support on Monday's trade, weakness only on break below.
- The pair is extending upside on the day on improved risk sentiment, has broken above 5-DMA at 106.21.
- Optimism in the equities markets and rising US 10yr treasury yield supporting the greenback.
- Currently, the major is trading at 106.28, slightly lower from session highs at 106.46.
- Technical studies are still bearish. RSI and Stochs are biased lower. -ve DMI is dominant and rising.
- The major is extending downward spiral since highs of 114.737 in Nov 2017, next bear target on violation at lies at 105.40 (major trendline support) could be 78.6% Fib at 103.04.
- Focus shall be on BoJ this week for further direction. Expectations are that the Bank of Japan will maintain its current monetary policy.
- Markets will pay keen attention to the Governor's presser on questions regarding strong yen against dollar.
Support levels - 106, 105.40 (trendline), 105, 104, 103.04 (78.6% Fib retrace of 98.787 to 118.662 rally)
Resistance levels - 106.38 (61.8% Fib), 107, 107.15 (20-DMA)
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