USD/JPY: better bid on Tokyo, eyes closes above 112.50
|USD/JPY is currently trading at 112.43, between a range of 112.12 and 112.50, +0.41% on the session.
USD/JPY has maintained the opening bid in today's Asian session, recovering from the risk-off sell-off from last week's Thursday Asian open in Tokyo when the N.Korean news took the pair lower in a knee-jerk.
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The US dollar, interest rates, and equities were little changed on Friday night, amid a series of Fed speeches. However, there was a drift higher in early European trade on Friday to 112.09 the high with technical support at 111.55 and the top of the Ichimoku cloud ahead of 111.04, the 200h-MA. A high eas made on the follow through in London at 112.17.
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However, NY capped the bid with votes for US health care bill were seen falling short. Also, Federal Reserve's Kaplan was more dovish than usual and that too weighed on the dollar.
"US 10yr yields ranged sideways between 2.24% and 2.26%, 2yr yields between 1.42% and 1.44%. Fed fund futures yields continued to price the chance of a December rate hike at 71%," explained analysts at Westpac.
Technically, Valeria Bednarik, chief analyst at FXStreet explained that the indicators are pulling back from overbought readings in the daily sticks, which is not enough to confirm a steeper slide, she added, noting that this supports an upcoming downward extension.
"In the 4 hours chart, technical indicators continue consolidating within positive territory, whilst the price remains well above the 100 and 200 SMAs, with the shortest gaining upward traction above the largest, around 110.00," Valeria noted.
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