USD/JPY recovers early lost ground, retakes 111.00 handle
|The post-FOMC greenback sell-off seems to have receded, with the USD/JPY pair reversing early losses and moving back above the 111.00 handle.
The pair on Wednesday witnessed a sharp reversal and tumbled around 115-pips in reaction to the less hawkish FOMC statement. The pair subsequently dropped back closer to over one-month lows touched at the beginning of this week, albeit seems to have found some support near the 110.80-75 region.
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The prevalent global risk-on environment, which tends to weigh on the Japanese Yen's safe-haven appeal, coupled with a modest US Dollar recovery seems to have prompted some short-covering and helped the pair to bounce back above the 111.00 handle.
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Investors now look forward to the US economic docket, featuring the release of US durable goods orders, goods trade balance and weekly jobless claims data, for some fresh impetus later during the NA session.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: "The 4-hour chart shows a bearish 50-MA & 200-MA crossover. The RSI has turned bearish again, while the spot has re-entered falling channel… An hourly close below 110.62 (Monday’s Doji candle) would negate the bullish doji reversal and shall open doors for a sell-off to 110.00 levels. On the higher side, only an end of the day close above 112.19 would add credence to the bullish doji reversal and open up upside towards 113.50 levels."
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