USD/JPY capped below 20-dma, further upside only on break above
- USD/JPY struggles at 20-DMA resistance at 110.26, intraday bias neutral.
- US dollar came under renewed selling pressure amid a retreat in Treasury yields.
- The pair hit 9-day high of 110.48 on Friday after upbeat NFP which rose 200k in Jan, beating expectations of 180k.
- However, the pair pared gains to close lower after safe demand for yen shot up as US stocks fell spooked by Yellen’s comments.
- Technically, the pair was capped at stiff resistance at 20-DMA and we see further upside only on break above.
- Rejection at 20-DMA could see test of channel base at 109.65 and then 78.6% Fib at 108.90.
- On the flipside, breakout above 20-DMA will raise scope for test of 200-DMA at 111.70.
Support levels – 109.65 (Channel base), 109.50 (5-DMA), 108.90 (78.6% Fib retrace of 107.318 to 114.737 rally)
Resistance levels – 110.26 (20-DMA), 110.48 (Feb 2 high), 111
Recommendation: Prefer to wait for clear directional bias.
Source: FXWire Technicals