USD/JPY recovery gains momentum, now eyeing 100-DMA hurdle
|The USD/JPY pair's recovery move from monthly lows seems to have picked up some pace in the past hour or so, lifting it back closer to the 113.00 handle.
The post-FOMC greenback selling pressure seems to have abated, with the pair snapping four consecutive days of losing streak and attempting a recovery back above the 100-day SMA important support break-point, turned immediate strong resistance.
A modest recovery in the US treasury bond yields helped the key US Dollar Index to bounce of multi-week lows and supportive of the pair's recovery from mid-112.00s, the lowest level since Feb. 28.
The recovery momentum, however, lacked conviction amid mildly weaker trading sentiment around European equity markets, which tends to benefit the Japanese Yen's safe-haven appeal.
Later during the NY session, speech by the Chicago Fed President Charles Evans would grab the spotlight and might provide some impetus ahead of the US President Donald Trump's speech during early Asian session on Tuesday.
G20 statement diluted the commitment to avoid protectionist trade measures - BBH
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet notes, "Friday’s retreat from 113.49 to 112.56 adds credence to bearish break below 50-DMA on Thursday and open doors for a sell-off to 111.73 (confluence of channel support and lower Bollinger band). Under 111.73, the spot would run into an immediate support at 111.60 (Feb low). Only a daily close below 111.60 would signal the continuation of the retreat from The December high of 118.66 levels. The daily RSI is below 50.00 sloping downwards, but still sufficiently away from the oversold territory. That signal potential for a drop to 111.73-111.60 levels. On the higher side, only a daily close back above the 50-DMA would signal bearish invalidation."
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.