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Short

USD/JPY scope for downside on bearish divergence

FX:USDJPY   U.S. Dollar / Japanese Yen
USD/JPY fails to hold major trendline breakout, scope for downside on bearish divergence.
US ADP report on private sector employment, followed by ISM non-manufacturing PMI will be closely watched for further impetus.
Fedspeaks will also be watched for fresh insights on the US interest rates outlook. A more constructive outlook on the Fed's tightening path will keep the USD buoyed.
Technical indicators on daily charts are still bullish , but 'Bearish Divergence' on RSI and Stochs raises scope for downside.
Next major resistance seen at 114.32 (61.8% Fib retracement of 118.662 to 107.318 rally).
200-DMA at 111.955 is strong support on the downside, weakness likely on break below.

Support levels - 112, 111.955 (200-DMA), 111.65 (38.2% Fib retracement of 118.662 to 107.318 rally)
Resistance levels - 113, 113.25 (Sept 27th high), 114, 114.32 (61.8% Fib)

Good to go short on decisive break below 5-DMA, target 111.95/ 111.65/ 111


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