FXStreet (Mumbai) - USD/JPY found fresh bids near hourly 50-SMA and once again takes on the recovery towards daily high reached near 5-DMA. USD/JPY eyes daily highs Currently, the USD/JPY pair trades 0.67% higher at 118.45, and recovers nearly 50 pips from a knee-jerk downward spike to 118 on China open. The bulls seem to regain lost momentum and march higher in early Europe, as the solid comeback staged by the Chinese equities, following yesterday’s over 7% slump, boosts the demand for riskier currencies such as the US dollar. The Chinese benchmark, the Shanghai Composite (SSEC) index jumps +2.29% while the Shenzhen’s CSI300 index rallies +2.46% towards closing hours. In addition, the recovery in oil prices further lifted market sentiment and traders preferred to take the yield advantage, giving up the safety-bet in the yen completely. Moreover, markets resorted to profit-taking after the recent decline, heading into the crucial US jobs data due later today. In the meantime, the sentiment on the European stocks will dictate further moves in the major. USD/JPY Technical levels to watch In terms of technicals, the immediate resistance is located at 118.58/60 (daily high/ 5-DMA). A break above the last, the major could test 118.76 (1h 100-SMA). While to the downside, the immediate support is located at 117.78/77 (1h 20 & 10-SMA) below which 117/ 116.95 (psychological levels/ daily S1) would be tested. For more information, read our latest forex news.