USD/JPY: Buyers in control, set to test 118

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 11, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The USD/JPY pair faced rejection just a whisker away from 118 handle, and now consolidates above 5-DMA at 117.68.

    USD/JPY sees more than 100-pips recovery

    Currently, the USD/JPY pair trades 0.31% higher at 117.81, fading a spike to session highs reached at 117.92. The USD/JPY pair halted its recovery from Aug lows just shy of 118 barrier, which eventually turned out to be the high of the day. From there, the prices retreated slightly and now gathers pace near hourly 50-SMA for another break to the upside.

    The upside in the USD/JPY pair can be attributed to the re-emergence of risk-sentiment into markets, largely on the back of rallying European indices. Meanwhile, the US dollar also appears to benefit from the rising demand for riskier currencies, with the DXY advancing 0.23% to 98.68.

    Markets now await the US labour market conditions report for fresh cues while attention now turns towards tomorrow’s Japan’s current account data and BOJ Kuorda’s speech in Paris.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 117.92/118 (daily high/ psychological levels). A break above the last, the major could test 118.23 (1h 100-SMA). While to the downside, the immediate support is located at 117 (round number) below which 116.76/70 (daily S1/ low) would be tested.
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