- USD/JPY slumped overnight amid concerns that corporate tax cuts would be significantly delayed.
- The pair slipped to fresh lows for the month, hit 113.09 before paring some losses to close at 113.45.
- Price action is currently hovering around 20-DMA at 113.47, strong support level.
- We see weakness on break below. Technical studies have turned bearish. RSI and Stochs are biased lower.
- 5-DMA at 113.68 is immediate resistance. Break above could see minor upside till 114.45. We see bearish invalidation only on break above.
Support levels - 112.98 (23.6% Fib retrace of 107.318 to 114.73 rally), 112.16 (50-DMA)
Resistance levels - 113.47 (20-DMA), 113.68 (5-DMA), 114, 114.45 (trendline)
Call update: We had suggested a short on the pair (http://www.econotimes.com/FxWirePro-USD-JPY-finds-strong-support-at-20-DMA-11340-good-to-go-short-on). TP1 hit.
Recommendation: Bias lower, stay short for further weakness.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -90.2569 (Bearish), while Hourly JPY Spot Index was at 102.381 (Bullish) at 0340 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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