USD/JPY benefits from risk-reversal, but for how long?
Risk reset remains the underlying theme in Asia this Thursday, with a brief stint of recovery witnessed across the markets, including the equities, treasury yields and the USD.
Hence, the USD/JPY took on the overnight recovery above 111.50, before meeting supply near 111.60 region, as markets raise concerns that the rebound could well be a dead-cat bounce or just a minor profit-taking rally after yesterday’s slump to four-month lows of 110.73.
More so, investors may once again turn cautious heading into the crucial Obamacare replacement (Trumpcare) bill vote in the House of Representatives late-Wednesday, especially in light of renewed concerns over Trump’s administration policies and lingering allegations his campaign had links to Russia.
On the data-front, there is nothing relevant on the cards from the US docket today, except for the jobless claims and new home sales data, although Fedspeaks will be closely eyed.
USD/JPY Technical levels to watch
The major finds immediate resistance at 111.93/96 (Fib R2/ 5-DMA). A break above the last, the major could test 112.33 (classic R2 & Fib R3) and 112.89 (10-DMA/ classic R3) beyond the last. While to the downside, the immediate support is seen at 111 (round number) next at 110.73 (multi-week low) and below that at 110.23 (week ended Nov 20 lows).
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
