USD/JPY bounces off lows, near 111.20

The greenback is clinging to its daily gains vs. its Japanese counterpart, with USD/JPY coming up to the 111.20/25 band after probing the 111.00 area earlier in the session.

USD/JPY focus on US vote

After dropping to fresh multi-month lows in the vicinity of 110.70 on Wednesday, the pair managed to regain the 111.00 handle although the subsequent upside lost momentum near 111.60 during overnight trade.

In the meantime, yields in the US money markets stay under pressure, with the 10-year reference gravitating above the 2.40% level after deflating to the sub-2.38% area yesterday.

Initial risk-on sentiment has removed some support from the safe haven JPY, although the pair should remain under the microscope in light of today’s voting on the American Health Care Act. The vote is considered crucial as it could mean the starting point of Trump’s fiscal plans.

Additionally, Initial Claims and February’s New Home Sales are due in the US data front along with the speech by Chief J.Yellen and Minneapolis Fed N.Kashkari (voter, dovish).

USD/JPY levels to consider

As of writing the pair is up 0.05% at 111.22 facing the next resistance at 111.77 (high Mar.22) ahead of 112.88 (high Mar.21) and then 113.38 (20-day sma). On the other hand, a drop below 110.73 (low Mar.22) would aim for 109.91 (50% Fibo of the November-December rally) and finally 108.18 (200-day sma).