USD/JPY bounces-off 110.50, but recovery lacks momentum
The bears took a breather over the last hours, allowing a tepid-bounce in USD/JPY from the mid-point of 110 handle, after the yen was sold-off into BOJ Governor Kuroda’s dovish remarks.
Kuroda, during his appearance in Parliament, said that it’s too early to talk about the exit strategy from the easy monetary policy, which squashed hopes that BOJ could bid a farewell from the current policy stance before Kuroda’s term expires next April.
However, the recovery attempts are seen running into key resistance lined up ahead of 110.70 region, as weakness surrounding the Japanese stocks keeps the risk-off sentiment intact. The Nikkei 225 index drops -0.50% to trade just under 19k mark.
Markets ignored the second part of the BOJ Tankan survey released earlier today, while yesterday’s unimpressive US manufacturing PMI data continue to keep the USD and treasury yields under pressure.
Next on tap for the major remains the US datasets, including the trade balance and factory orders, which will have a significant influence on the spot.
USD/JPY Technical levels to watch
The major finds immediate resistance at 111.09/11 (10-DMA/ daily pivot). A break above the last, the major could test 111.50 (psychological levels) and 111.95/112 (20-DMA/ round figure) beyond the last. While to the downside, the immediate support is seen at 110.50/49 (4-day low) next at 110/109.82 (zero figure/classic S3) and below that at 109.53 (200-DMA).
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.
