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USD/JPY: Gains capped by 5-DMA, Bulls exhausted?

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

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Having recovered completely from the previous drop, the USD/JPY pair struggles to extend further, with the bulls looking exhausted near 5-DMA

    USD/JPY stuck around 119.15

    Currently, the USD/JPY pair trades 0.21% higher at 119.15, unable to break beyond 119.25 highs. The major keeps gains as bulls take a breather and await fresh incentives from the European open for further momentum.
    Whilst, the USD/JPY pair struggles above 119 handle as the greenback recedes gains against its major competitors and now trades muted at 94.47 levels.

    However, the renewed optimism on the US economy after the recent datasets has triggered a fresh wave of risk-on trades, keeping the major underpinned.

    The US CPI dropped 0.2% m/m in Sept, matching forecasts while the core CPI accelerated to 1.9% in September, outpacing the 1.8% gain expected. While the jobless claims fell further, coming in at the lowest levels since 1973.

    Looking ahead, the dollar-yen pair will continue to track the broader market sentiment ahead of the crucial US prelim consumer sentiment and industrial production data due later today.

    USD/JPY Technical levels to consider


    The pair holds above 119 handle eyeing the next resistance located at 119.34/36 (5-DMA and daily R3) beyond which 119.73/77 (10-DMA & hourly 200-SMA) could be tested. Above the last, the pair could climb further towards 120 barrier. While to the downside immediate support might be located at 118.83/70 (daily lows & pivot), below which 118.22 (daily S1) could be exposed. A breach of the last, the pair could drop to 118.04/118 (Oct 15 Low & round number).
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