USD/JPY: The dollar weakens on higher equities, oil prices

Slobodan Drvenica Windsor Brokers

USD/JPY

The dollar accelerated lower in early US session trading on Tuesday, repeating the pattern from the previous day.
Fresh strength of equities following shallow pullback and higher crude oil prices deflate greenback for the second straight day.
Reversal pattern is developing on daily chart and profit-taking after nearly 4% advance in March could help pullback.
Fresh bears broke below psychological 110 support (reinforced by rising 10DMA) and hit one week low (109.66) with close below 110 needed to confirm initial bearish signal.
Next key support lays at 109.38 (Fibo 38.2% of 108.40/110.96) and firm break here to risk deeper pullback.
Weakening daily studies (14-d momentum, RSI, stochastic) are heading south and support scenario.
Failure to close below 110 handle would weaken bears but negative near-term bias is expected to remain while the action stays below 5DMA (110.39).

Res: 110.00; 110.39; 110.74; 110.96
Sup: 109.66; 109.38; 109.01; 108.40

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.

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