USD/JPY firmer, on its way to 200-DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The upbeat momentum in the USD/JPY pair extends into a third day today, with the Tokyo bringing in fresh demand for the greenback as all eyes remain on the much awaited Fed lift-off later today.

    USD/JPY testing 10-DMA at 121.87

    Currently, the USD/JPY pair trades 0.11% higher at 121.82, recovering from a dip to 120.60 reached in opening trades. The major remains on the bid and extends higher, as the Asian traders prefer to hold the US currency ahead of the crucial Fed decision on the interest rates, with markets expecting the US central bank to lift rates by 0.25bps, thus, marking the first rate hike in almost a decade.

    Moreover, a solid rebound seen in the Asian markets on the back of short-covering and the overnight technical correction in oil prices lift the sentiment in Asia and supports further upmoves in the USD/JPY. The Japanese Nikkei jumps 1.85% and Australia’s ASX is advancing 1.77% so far. Also, in line with expectations US CPI data released in the US last session underpins the upside in the major.

    Looking ahead, the focus now remains on the key Fed outcome as the central bank concludes its 2-day policy meeting later today. Markets will also closely eye the Dots plan and the economic projections from the Fed.

    USD/JPY Technical levels to watch

    The prices head higher and find the immediate resistance at 121.95/122 (200-DMA/ round number). A break above the last, the major could test 122.11/13 (50-DMA/ 1h 50-SMA). While to the downside, the immediate support is located at 121.60 (daily low) below which 121.36 (1h 20-SMA) would be tested.
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