USD/JPY rebounds sharply in tandem with DXY, eyes on 112.00
The US dollar caught a fresh bid-wave across the board, prompting USD/JPY to stage a solid rebound from a dip to 111.20 levels amid holiday-thinned markets. Most major Asian and European markets are closed today in observance of their respective National holiday.
The latest leg higher in the spot can be mainly attributed to resurgent USD demand against its main competitors, after the headlines hit the wires that the US congressional negotiators have reached a deal to fund government and avert a financial shutdown.
Moreover, a better risk environment combined with thin markets exaggerate the moves in the major, while markets prefer to hold the US currency heading into a big week ahead, with focus on central banks’ policy decisions, US NFP report and Macron/ Le Pen run-off on May 7.
In the meantime, the major now looks forward to the US treasury secretary Mnuchin’s speech and a host of US macro news due later in the day for fresh incentives.
USD/JPY Technical levels
A break above 111.78 (4-week tops) would expose 112 (round figure) and 112.61 (100-DMA). On the other hand, a breach of support at 111.37 (5-DMA) could yield a test of 111 (key support) and 110.61/49 (10 & 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.
