USD/JPY outlook: Bears resume after Fed and eye key 200WMA support

Slobodan Drvenica Windsor Brokers

USD/JPY

The pair extends weakness after near-term bears paused on Wednesday, hitting 1 1/2 week low as dollar came under pressure after Fed minutes signaled that the central bank would stick to its ultra-accommodative policy until getting firmer signals that accelerating economic recovery is sustained.

Fresh weakness probes through 20DMA (109.50) with daily close below here to further weaken near-term structure and bring in focus strong support at 108.98, provided by 200WMA.

Fading bullish momentum on daily chart supports scenario while more signals for deeper pullback could be seen on weekly chart, where RSI and stochastic are reversing from overbought zone and momentum turned south.

Profit-taking after strong rally in March, could further accelerate dollar’s weakness.

Broken 10DMA (110.09) marks solid barrier which needs to keep the upside limited and maintain bearish bias.

Res: 109.94; 110.09; 110.55; 110.74
Sup: 109.37; 108.98; 108.40; 107.80

Interested in USD/JPY technicals? Check out the key levels

1. R3 110.36
2. R2 110.15
3. R1 110
PP 109.79
1. S1 109.64
2. S2 109.43
3. S3 109.27

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD bounces off lows, back to 1.1860

EUR/USD now manages to regain some balance, retesting the 1.1860-1.1870 band after bottoming out near 1.1830 following the US NFP data on Wednesday. The pair, in the meantime, remains on the defensive amid fresh upside traction surrounding the US Dollar.

GBP/USD rebounds to 1.3660, USD loses momentum

GBP/USD trades with decent gains in the 1.3660 region, regaining composure following the post-NFP knee-jerk toward the 1.3600 zone on Wednesday. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold stays bid, still below $5,100

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of humble gains in the US Dollar and firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.