USD/JPY retreats from high, still holding comfortably above 112.00 handle
|The greenback recovery against its Japanese counterpart stalled near mid-112.00s handle, with the USD/JPY pair retreating from session peak after the US economic data.
Currently trading around 112.30-25 region, the release of durable goods order data failed to extend additional support to the pair's ongoing recovery move from sub-112.00 level touched during early Asian session on Monday. On Monday, the Commerce Department reported orders for durable goods climbed 1.8% in January while additional details revealed that orders excluding transportation items contracted by 0.2%, perhaps indicating that businesses are awaiting for clarity over the US President Donald Trump's pro-growth economic policies.
Hence, investors seemed reluctant to carry big positions ahead of Trump's first address to Congress on Tuesday, which might trigger a fresh leg of volatility in the FX market and provide impetus for the pair's near-term trajectory.
Meanwhile, a mildly cautious investors' sentiment, in wake of renewed Brexit worries on talks of a second Scottish independence referendum, has been supportive for the Japanese Yen's safe-haven appeal and possibly collaborating towards restricting any sharp recovery for the major.
Up next would be the release of pending home sales data from the US, ahead of Dallas Fed President Robert Kaplan's speech, which would be looked upon for some short-term trading opportunities.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet notes, "Technically, the 1 hour chart shows that the 100 and 200 SMAs have gained downward strength well above the current level, while the RSI indicator holds around 50 and the Momentum bounces from its 100 level, still holding below previous daily highs. In the 4 hours chart, indicators have posted modest recoveries from oversold levels, but remain well below their mid-lines, while the price remains far below the 100 and 200 SMAs, indicating that the upward potential remains well-limited."
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.