USD/JPY looks to regain 114 amid risk-recovery & bullish DXY

Dhwani Mehta FXStreet

The USD/JPY pair stages almost 1 big figure recovery so far this session and now makes headways towards 114 handle amid broad based US dollar strength and easing risk-off trades.

USD/JPY rises back to test 5-DMA at 113.89

The dollar-yen is on a roll higher after a weaker opening in Asia this Monday, after risk-off gripped market as the Asian traders reacted negatively to the Italian PM Renzi’s defeat in Sunday’s referendum and to his resignation to the president for consideration tomorrow.

However, the bulls were quickly rescued by a broadly higher greenback as risk sentiment recovered somewhat, as markets continue to cheer Dec Fed rate hike talks, in wake of upbeat NFP report published last Friday. The major is last seen changing hands at 113.80, recovering from a daily low of 112.88, up +0.25% on the day, while the Nikkei 225 index recovers to 18,330 points, now dropping -0.52%.

In the day ahead, the major will get influenced by persisting risk trends as markets digest the Italian referendum news, while attention gradually shifts towards the US ISM services and LMCI data due later in the NA session. Besides Fedspeaks will also remain in focus.

USD/JPY Technical levels to watch

The major finds immediate resistance at 114.50 (psychological levels). A break above the last, the major could test 114.83 (10-month high) and 115 (zero figure) beyond the last. While to the downside, the immediate support is seen at 113.29 (10-DMA) next at 112.88 (daily low) and below that at 112.64 (daily S2).

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.

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