USD/JPY sees minor-recovery towards 118.80

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 6, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The USD/JPY pair attempts a tepid-bounce in the late-Asian trades, although the upside faces stiff resistance near the hourly 10-SMA located at 118.85 levels.

    USD/JPY supported at 118.40

    Currently, the USD/JPY pair trades -0.28% lower at 118.72, recovering partially from a dip to fresh three-month lows of 118.37. The US dollar fights hard to regain lost ground and recovers slightly against its Japanese counterpart, as risk-off sentiment continues to dominate on renewed China woes, underscored by poor manufacturing and services PMI.

    Earlier on the day, the dollar-yen pair dropped to the lowest levels since Oct 2015 after the Chinese central weakened the yuan further and sparked a renewed sell-off in the major Asian equities. PBOC’s latest move helped boost the safe-haven bids for the yen and dragged the major lower.

    Ahead in the day, the yen is expected to hold ground as the European stocks are tipped off for a lower start, as suggested by sliding European indices futures. Meanwhile, traders remain hopeful that a host of upcoming US economic data and the FOMC minutes may provide the much-needed impetus to the greenback.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 119 (round number). A break above the last, the major could test 119.58 (5-DMA). While to the downside, the immediate support is located at 118.37 (daily low) below which 118.04 (Oct 15 Low) would be tested.
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