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USD/JPY corrects further, below 20-DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 17, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The bid tone surrounding the USD/JPY pair keeps decreasing as we progress towards the European open, as the greenback recedes Fed-inspired gains against its major peers.

    USD/JPY halts a 3-day rally

    Currently, the USD/JPY pair trades 0.07% higher at 122.31, now heading towards the 50-DMA support placed at 122.17. The major took a breather in its upsurge and erased a major chunk of gains as markets moved past the Fed hike news and now await the European open for further momentum.

    While the USD/JPY pair finds support from the dismal Japanese trade data, which continues to weigh on the yen. Japan's merchandise trade balance went from a surplus of ¥111.5 billion in October to a shortfall of ¥379.7 billion last month.

    Looking ahead, the US dollar may remain bid on hawkish Fed decision and is likely to garner further cues from a slew of macro data from the US due later in the NY session.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 122.85 (daily R1). A break above the last, the major could test 123/123.06 (round number/ Dec 9 High). While to the downside, the immediate support is located at 122.11 (50-DMA) below which 122 (1h 200-SMA) would be tested.

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