USD/JPY tested 119.70 amid risk-on mode in Asia

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 5, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The bid tone around the USD keeps growing bigger as we head into the mid-Asian trades, now pushing USD/JPY to sessions highs well above the mid-point of 119 levels.

    USD/JPY heads towards hourly 50-SMA at 119.80?

    Currently, the USD/JPY pair trades 0.13% higher at 120.62, having posted fresh session highs at 119.69 levels in last hours. The major extends its overnight recovery mode into Asia and now trades firmer on the back of resurfacing risk-on market profile triggered by robust recovery in the Asian stocks, especially the Chinese indices.

    Moreover, rising oil prices also added to the persisting risk-on trades and boosted the demand for risker currencies such as the greenback, thereby lifting the sentiment around USD/JPY.

    While from a wider perspective the recent strength seen in the yen against the USD appears short-lived on the back of the divergent monetary policy outlooks between the Fed and BOJ, after the BOJ chief Kuroda reiterated on Monday that the central bank is willing to take bolder steps to achieve 2% price target.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 119.80 (1h-50-SMA). A break above the last, the major could test 120/120.06 (round number/ 5-DMA). While to the downside, the immediate support is located at 119.28 (1h 20-SMA) below which 119/118.86 (psychological levels/ daily S1) would be tested.
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