USD/JPY recovers from 4-week lows and rises back above 113.00
- Pair rebounds sharply amid a recovery of the USD.
- DXY erased most of day’s losses.
- Dow Jones drops 0.35%, off lows while US bonds moved off highs.
The USD/JPY pair bottomed at 112.47 after the release of US economic data that included retail sales and CPI. Both readings came near expectations but the greenback reacted to the downside. The slide was short-lived and it rebounded sharply. “A pick-up in core inflation and solid retail sales suggests investors may still be too cautious about the rate hike outlook for the next year”, said analyst from ING.
US CPI: Soft headline, but core inflation is strengthening - Wells Fargo
Market sentiment has been moving back and forth, like speculations about the US tax reform plan, affecting the USD/JPY that is now following again US yields. The 10-year is moving away from lows, supporting the upside in the pair.
The pair rose back above 113.00. At the moment of writing was trading at 113.10, still down for the day but significantly off daily lows.
The US Dollar strengthened during the American session. The DXY rose from 93.23 back to 93.70 while gold tumbled from $1288/oz to $1277/oz. Equity prices in Wall Street trimmed losses. The Dow Jones was down only 0.35% after losing earlier more than 0.80%.
USD/JPY Technical levels
To the upside, resistance levels might be located at 113.25 (Nov 14 low), followed by 113.50 (Nov 15 high) and 113.75 (Nov 13 high). On the flip side, support levels lie at 112.95 (Oct 30 low), 112.60 and 112.45/50 (Nov 15 low).
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
