USD/JPY opens the week on a bearish note, ignores higher UST yields, extends declines on bearish comments from Fed's Bullard.
Bullard said that the Fed should hold off on hiking further, as the shrinking yield curve is a bearish sign for the economy.
The pair has broken below 20-DMA and 23.6% Fib to hit 2-week lows of 110.75 before paring some losses to currently trade at 110.93.
Technical studies also support downside. Bearish divergence and rollover of momentum indicators from overbought levels support our bearish conviction.
Bears now target 50-DMA at 110.51, break below will see test of 200-DMA at 110.10.
5-DMA at 112.10 is immediate resistance. 200W SMA at 113.24 is major resistance and we see further upside only on break above.
For the week, focus will be on Japan inflation for July and US GDP index for Q2 for impact on price action.
Support levels - 110.51 (50-DMA), 110.10 (200-DMA), 109.90 (cloud and 38.2% Fib)
Resistance levels - 111.15 (23.6% Fib), 111.30 (20-DMA), 112.10 (5-DMA)
Good to go short around 111, SL: 111.60, TP: 110.50/ 110.10
Bullard said that the Fed should hold off on hiking further, as the shrinking yield curve is a bearish sign for the economy.
The pair has broken below 20-DMA and 23.6% Fib to hit 2-week lows of 110.75 before paring some losses to currently trade at 110.93.
Technical studies also support downside. Bearish divergence and rollover of momentum indicators from overbought levels support our bearish conviction.
Bears now target 50-DMA at 110.51, break below will see test of 200-DMA at 110.10.
5-DMA at 112.10 is immediate resistance. 200W SMA at 113.24 is major resistance and we see further upside only on break above.
For the week, focus will be on Japan inflation for July and US GDP index for Q2 for impact on price action.
Support levels - 110.51 (50-DMA), 110.10 (200-DMA), 109.90 (cloud and 38.2% Fib)
Resistance levels - 111.15 (23.6% Fib), 111.30 (20-DMA), 112.10 (5-DMA)
Good to go short around 111, SL: 111.60, TP: 110.50/ 110.10