USD/JPY -0.35% hovers around strong trendline support at 108.40, we see weakness on break below.
Technical studies are biased lower, RSI and stochs point south and we see -ve DMI dominance.
Price action is below daily cloud and major moving averages and recovery seems to be capped at 5-DMA.
Break below 108.40 will see test of 108 levels ahead of 107.31 (Sept 8 low).
On the flipside, close above 5-DMA could see test of 20-DMA at 109.52. Break at 20-DMA could invalidate bearish bias.
Focus now will be on the US inflation report due to be released on Wednesday at 13:30 GMT .
Support levels - 108.40 ( trendline ), 108.13 ( Double bottom ), 107.31 (Sept 8 low)
Resistance levels - 108.76 (5-DMA), 108.90 (78.6% Fib), 109.52 (20-DMA)
Good to go short on break below 108.40, SL: 108.90, TP: 108.15/ 108/ 107.35.
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