|

USD/JPY defends 112.00, bleed stemmed by gains in S&P 500 futures

  • The USD/JPY has bounced off the psychological support of 112.00 in Asia, possibly due to an uptick in the S&P 500 futures. 
  • The pair found bids below the 50-day exponential moving average (EMA) for the second day. 

The USD/JPY pair defended 112.00 a few minutes before press time and is now looking to post gains, tracking the positive action in the US index futures. 

As of writing, the S&P 500 are reporting a 0.60 percent gain. The moderate rise seems to have alleviated the downside pressure around the USD/JPY, helping it recover some lost ground. After all, the relative strength index on the 4-hour chart is reporting oversold conditions in USD/JPY. 

Building a base around 50-day EMA?

The positive action in the S&P 500 futures has helped the pair fade the drop below the 50-day EMA, currently located at 112.12.

Notably, the USD/JPY bears have failed to keep losses below the 50-day EMA for the second time in the last 12 hours - the EMA was breached in the overnight trade, as the Dow Jones Industrial Average fell by 500 points, following Wednesday’s 800 point drop, but the drop to 111.83 was short-lived and the NY close was above the 50-day EMA. 

The seller’s exhaustion below the 50-day EMA indicates scope for a minor corrective rally, although gains will likely be transient if the US equities continue to slide. However, as noted by Marc to Market's Marc Chandler, the penetration of  200-moving average in the S&P 500 has been mostly brief and shallow and proven itself a good buying opportunity over the last couple of years. 

So, it seems safe to say that the odds are stacked in favor of a minor corrective rally in the USD/JPY pair. 

USD/JPY Technical Levels

FXStreet's Valeria Bednarik writes, "the 111.90 region is a strong static support, and renewed selling interest here favors an extension toward the 111.20 price zone. The bearish pressure could ease on a recovery above 112.60, quite unlikely at this point."

Resistance: 112.56 (Sept. 26 low), 112.82 (10-day EMA), 113.00 (psychological hurdle)

Support: 111.83 (previous day’s low), 111.39 (100-day EMA), 113.00 (psychological level)

 TREND INDEXOB/OS INDEXVOLATILY INDEX
15MBullishNeutral Shrinking
1HBearishNeutral High
4HBearishOversold High
1DBearishNeutral Shrinking
1WNeutral Shrinking

Author

Omkar Godbole

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

More from Omkar Godbole
Share:

Editor's Picks

EUR/USD shifts its attention to 1.1900 and above

EUR/USD has shaken off Tuesday’s dip, pushing back beyond the 1.1800 mark amid decent gains as  Wednesday’s session draws to a close. The rebound is largely driven by a modest pullback in the US Dollar, as markets digest the aftermath of President Trump’s SOTU speech and continue to monitor trade-related headlines and signals from the White House.
 

GBP/USD challenges multi-day highs near 1.3530

GBP/USD leaves behind the previous day’s decline and regains fresh upside traction on Wednesday, surpassing the 1.3500 barrier in a context of a modest decline in the Greenback and a generalised improved mood in the risk-linked space. Meanwhile, the US tariff narrative continues to dictate the mood among market participants after Presidet Trump’s SOTU speech failed to surprise markets.

Gold remains bid and close to $5,200

Gold buyers are returning to the fold on Wednesday, targeting the $5,200 area and possibly beyond, after Tuesday’s corrective dip from monthly highs. The rebound in the precious metal comes as the US Dollar loses traction, with Trump’s SOTU speech offering little fresh direction and AI-related nerves continuing to ease.

UK financial watchdog advances stablecoin oversight as four firms pilot issuance

The Financial Conduct Authority (FCA) in the United Kingdom (UK) is advancing toward the final stablecoin regulatory framework with a pilot program involving four companies, including Monee, Financial Technologies ReStabilise, Revolut and VVTX.

Nvidia earnings to influence AI trade and broader market sentiment

For the last three years, Nvidia has been the engine of the AI boom, and now Wall Street is watching to see whether that momentum can keep going. High-growth stocks have been struggling to maintain their bullish trend in 2026.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.