USD/JPY recovery remains capped by 5-DMA

The USD/JPY pair finally broke the overnight consolidation phase to the downside post-Tokyo open, before the bulls fought back control and drove the rate back towards 104 handle on the release of China’s Q3 GDP report.

USD/JPY capped by 5-DMA at 103.96

The JPY bulls try hard to keep its control over the USD/JPY pair, as markets digest the latest Chinese Q3 GDP report, industrial production and retail sales data, which came out mixed. The pair is last seen exchanging hands at 103.81, recovering from 103.66 – daily lows.

However, the recovery in the major appears to lack follow-through amid a steeper treasuries yield curve, which points towards diminishing bets of a Fed rate hike this year, and hence, weighs on the US dollar across the board.   

Next of note for the major remains the US housing starts and building permits data due later in the NA session.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 103.96/104 (5-DMA/ round figure). A break above the last, the major could test 104.50 (psychological levels) and 104.63 (3-month high) beyond the last. While to the downside, the immediate support is seen at 103.60 (daily S1), next at 103.00 (key support) and below that at 102.89 (20-DMA).