USD/JPY phase of consolidation in Asia, re-takes 118

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Barcelona) - USD/JPY is seen reversing a brief downward spike to session lows near 5-DMA and now re-takes 118 handle, finding support from the rising Japanese stocks.

    USD/JPY bounces-off lows near 5-DMA at 117.87

    Currently, the USD/JPY pair trades modestly flat at 117.96, attempting another run towards hourly 200-SMA now placed at 118.12. The USD/JPY pair continues to consolidate the upside below 200-SMA on the hourly sticks and receives fresh impetus a steady yuan fix, while positive tone on the Japanese stocks also boosts the appetite for risk and thus, diminishes the safe-haven bids for the yen. Meanwhile, the Nikkei snaps previous losses and gains 0.60% to trade around 17,350 levels.

    However, the upside remains capped on the back of a mixed US dollar amid mixed sentiment in Asia, as China stocks continue to underperform. Moreover, Thursday’s weak employment data and in-line with expectations import prices index from the US, also adds to the bearish moods around the greenback. Therefore, keeps the upside capped in USD/JPY.

    Looking ahead, the highly-anticipated US retail sales data is lined up for release later in the NY session. Meanwhile, broader market sentiment and the oil price-action will continue to dominate the moves in the major.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 118.12 (1h 200-SMA). A break above the last, the major could test 118.39/59 (Jan 13 High/ daily R1). While to the downside, the immediate support is located at 117.86/ 76 (Today’s Low/ 1h 100-SMA) below which 117.27/20 (Jan 14 & 12 Low) would be tested.
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