USD/JPY: Bears Take Control in Tokyo Below 110 Handle
has dumped in Tokyo from 110.20 down to a low of 109.85 so far. Stocks
in Asia got off to a good start although the Nikkei slumped on a
stronger than expected trade surplus along with the G7 summit that was
not favourable to Japan's needs in a weaker currency for their
Otherwise, the week started off to a slow start elsewhere and we now await for the Fed speakers this week including Yellen at the close of the week for accompanying insight as to where June is a likely month for a Fed hike. Data will be key as well with the FOMC's dependency on an improvement in data before they can be in a position to hike.
To the downside, the 20 sma on the 4hr sticks located at 109.90 has been tested with next support seen at the 100 sma at 109.71. The 200 sma on the same time frame is located at 108.82.
A correction back to the upside looks for the 55 dma at 110.30 ahead of the 20th May high of 110.58 that has proven to be an area of offers. The key resistance is likely to be located at the 27th April high at 111.74 and 111.85 24th April highs where the double top occurred and subsequent sell-off to 105.54 early May lows.