USD/JPY clings to modest recovery gains around mid-105s

USD/JPY looks to close higher after a two-day slump.
US Dollar Index climbs above 93.50 on Tuesday.
Risk aversion helps JPY stay resilient against its rivals.

Eren Sengezer FXStreet

The USD/JPY closed the previous two trading days in the negative territory and lost more than 70 pips during that period. After staying in a consolidation phase during the first half of the day on Tuesday, however, the pair gained traction and advanced to a daily high of 105.64 during the American session. As of writing, USD/JPY was up 0.24% on a daily basis at 105.55.

DXY climbs above 93.50 on Tuesday

Renewed USD strength on Tuesday fueled USD/CAD's recovery. With North American traders returning after a three-day weekend, the US Dollar Index shot higher in the early trading hours of the American session and was last seen gaining 0.57% on a daily basis at 93.57.

The lack of progress in the US coronavirus relief negotiations seems to be causing investors to stay away from risk-sensitive assets. Reflecting the cautious market mood, both the S&P 500 and the Dow Jones Industrial Average indexes lose around 0.4% on the day.

Meanwhile, safe-haven flows also help the JPY stay resilient against its rivals and cap USD/JPY's upside for the time being. The only data from the US showed on Tuesday that the Consumer Price Index (CPI) in September edged higher to 1.4% on a yearly basis and came in line with analysts' forecasts.

In the early Asian session on Wednesday, Industrial Production and Capacity Utilization data from Japan will be looked upon for fresh impetus.

Technical levels to watch for

USD/JPY

Overview
Today last price	105.54
Today Daily Change	0.20
Today Daily Change %	0.19
Today daily open	105.34

Trends
Daily SMA20	105.38
Daily SMA50	105.79
Daily SMA100	106.48
Daily SMA200	107.45

Levels
Previous Daily High	105.8
Previous Daily Low	105.24
Previous Weekly High	106.11
Previous Weekly Low	105.28
Previous Monthly High	106.55
Previous Monthly Low	104
Daily Fibonacci 38.2%	105.46
Daily Fibonacci 61.8%	105.59
Daily Pivot Point S1	105.12
Daily Pivot Point S2	104.9
Daily Pivot Point S3	104.56
Daily Pivot Point R1	105.68
Daily Pivot Point R2	106.02
Daily Pivot Point R3	106.24

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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