USD/JPY marches higher toward mid-112s as Wall Street continues to pull away from lows
|- Wall Street erases the majority of early losses.
- US Dollar Index continues to move sideways below 96.
- USD/JPY remains on track to close the day in the red.
After sliding below the 112 handle in the early NA session, the USD/JPY pair retraced a portion of its daily fall as the improving market sentiment forced the safe-haven JPY to weaken against its rivals. As of writing, the pair was trading at 112.45, still losing 0.3% on a daily basis.
The bearish pressure surrounding the USD/JY pair on Tuesday picked up as major equity indexes started the day sharply lower. With both Dow Jones Industrial Average and the S&P 500 losing over 2% during the first half of the session, the pair extended its losses. However, Wall Street gained traction and erased most of its daily losses to help the pair reverse its course. At the moment, the DJIA was down only 0.4% while the S&P 500 was losing 0.2%.
Meanwhile, the US Dollar Index is struggling to find direction following yesterday's rally amid a lack of significant macroeconomic data releases. Speaking at an event organized by the Louisiana State University, Atlanta Fed President Raphael Bostic said that he was in favour of a fourth rate hike in 2018 and argued that possible headwinds wouldn't throw the Fed off track.
In the early trading hours of the Asian session on Wednesday, Nikkei Manufacturing Index and Leading Economic Index from Japan will be looked upon for fresh impetus. Later in the day, Markit is going to publish the manufacturing and service sector PMI reports for the U.S.
Technical levels to consider
On the downside, supports for the pair could be seen at 112/111.95 (psychological level/daily low), 111.70 (100-DMA) and 111.15 (Sep. 13 low). On the upside, the initial resistance aligns at 112.85 (daily high/20-DMA) ahead of 113.30 (Oct. 10 high) and 113.90 (Oct. 8 high).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.