USD/JPY recovers large part of daily drop on improved sentiment, trades near 109.50

Wall Street turns positive on the day in the NA session.
US Dollar Index inches closer to the 97 mark.
US Pres. Trump says stocks will go up once trade deals are finalised.

Eren Sengezer FXStreet

The USD/JPY pair dipped below the 109 mark for the first time in more than 7 months on Wednesday during the European trading hours but was able to retrace the majority of this drop in the second half of the day supported by improved market sentiment. As of writing, the pair was trading at 109.45, down 0.25% on a daily basis.

Earlier today, concerns over a global economic slowdown caused markets to start the new year in a negative mood. Major Asian and European equity indexes recorded losses to confirm the risk-off theme and allowed the JPY to gather strength as a safer alternative. However, with Wall Street gaining traction and moving into the positive territory following a daily start in the red, the risk appetite was felt, once again, in the markets.

Easing concerns over the U.S. - China trade conflict following President Trump's comments today fueled the U.S. stocks late rise in the session and the S&P 500 was last up 0.27% on the day while the Nasdaq Composite was gaining 0.8%.

Additionally, the decisive climb witnessed in the US Dollar Index reflected a broadly stronger greenback and provided an additional boost to the pair. As of writing, the DXY was up 0.9% on the day, looking to conquer the 97 handle for the first time since the Christmas break.

Technical levels to consider

USD/JPY

Overview:
    Today Last Price: 109.44
    Today Daily change: -31 pips
    Today Daily change %: -0.282%
    Today Daily Open: 109.75
Trends:
    Previous Daily SMA20: 111.92
    Previous Daily SMA50: 112.67
    Previous Daily SMA100: 112.35
    Previous Daily SMA200: 111.06
Levels:
    Previous Daily High: 109.87
    Previous Daily Low: 109.57
    Previous Weekly High: 111.41
    Previous Weekly Low: 110
    Previous Monthly High: 113.83
    Previous Monthly Low: 109.55
    Previous Daily Fibonacci 38.2%: 109.75
    Previous Daily Fibonacci 61.8%: 109.68
    Previous Daily Pivot Point S1: 109.59
    Previous Daily Pivot Point S2: 109.42
    Previous Daily Pivot Point S3: 109.28
    Previous Daily Pivot Point R1: 109.89
    Previous Daily Pivot Point R2: 110.03
    Previous Daily Pivot Point R3: 110.19

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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