USD/JPY picks-up pace on higher European stocks

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 3, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - USD/JPY catches fresh bid tone following higher start on the European markets, driving the major to fresh daily highs at the mid-point of the 123 handle.

    USD/JPY eyes Wednesday’s high

    Currently, the USD/JPY pair trades 0.18% higher at 123.47, flirting with session highs reached at 123.50 in late-Asia. The major ran through fresh bids just above the hourly 10 and 20-SMA confluence located at 123.34 levels and extended higher in a bid to test two-week highs at 123.67 levels.

    The demand for the US currency is on the rise on the back of a turnaround in the risk conditions after the European stocks opened elevated ahead of the ECB policy decision. European indices remain boosted on hopes of further easing by the ECB at its meeting due later today. The German benchmark, the DAX trades 0.24% higher while the UK’s FTSE trades modestly flat while the Euro Stoxx 50 advances 0.30%.

    Moreover, the yen dropped further after BOJ board member Kiuchi raised concerns over the side-effects of the easy money policy while adding that the BOJ 2% target may not be achieved even in FY 2017.

    Meanwhile, the pair will continue to track the broader market sentiment ahead of the crucial ECB meeting and Fed Chair Yellen’s testimony due later today.

    USD/JPY Technical levels to watch

    The prices remain slightly bid and find the immediate resistance at 123.64 (Nov 19 High). A break above the last, the major could test 124/124.11 (round number/ daily R2). While to the downside, the immediate support is placed at 123.10 (5-DMA) below which 122.85 (1h 200-SMA) would be tested.
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