USD/JPY slides in tandem with Nikkei, 112 on sight

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The offered tone surrounding the USD/JPY pair continues to gather pace so far this session, as the yen remain in demand on the back of the extension of risk-off trades.

    USD/JPY recovery capped ahead of 112.50

    The major remains under heavy selling pressure as we head towards mid-Asia, as risk-off market profile continue to dominate and bolster the bids for the safe-haven yen amid falling Japanese stocks. The Japanese benchmark index, the Nikkei 225 drops -0.83%.

    Further, the persisting risk-off sentiment intensified after the Chinese manufacturing PMI showed that the manufacturing sector activity sinks further into contraction and reignited concerns over the health of the Chinese economy, thereby spooking markets.

    While the recent series of weak Japanese data continues to be ignored by the traders as the broader market sentiment continues to lead. Meanwhile, next on tap for the major today remains the ISM and Markit manufacturing PMI reports, which will shed more light on the US economic outlook and hence, Fed rate hike prospects in 2016.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 112.76/77 (1h 20-SMA/ 10-DMA). A break above the last, the major could test 113/113.08 (round number/ 5-DMA). While to the downside, the immediate support is seen at 111.78/75 (daily S1/ Feb 23 Low) and below that at 111.04/111 (Feb 24 Low/ psychological levels).
    For more information, read our latest forex news.

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