USD/JPY: Rejected at 5-DMA, drops back to 113.50

Dhwani Mehta FXStreet

The recovery in the USD/JPY pair ran into the 5-DMA resistance located near 113.85 region, sending the rate sharply lower amid renewed weakness seen in the US treasury yields.

USD/JPY next support seen at daily pivot (113.33)

The dollar-yen pair met fresh sellers at higher levels and hence, stalled its recovery from the Italian referendum-led massive sell-off, as a renewed bout of risk-aversion gripped markets after having witnessed aggressive selling in the US treasury yields, which resulted in stalled USD buying.

The major is last seen changing hands at 113.56, moving-off daily highs reached at 113.86, now trading modestly flat on the day, while the Nikkei 225 index drops -0.63% to 18,305 levels.

The major dropped as low as 112.88 levels in the Asian opening trades, after markets flocked to safety after the Italian PM conceded defeat in Sunday’s Italian referendum on a No vote win

Next of note for the major remains the US ISM services and LMCI data due later in the NA session. In the meantime, the spot will get influenced by the RO-RO sentiment prevalent in the market.

USD/JPY Technical levels to watch

The major finds immediate resistance at 113.85 (5-DMA). A break above the last, the major could test 114.50 (psychological levels) and 114.83 (10-month high) beyond the last. While to the downside, the immediate support is seen at 113.33/29 (daily pivot/ 10-DMA) next at 112.88 (daily low) and below that at 112.64 (daily S2).

1. R3 114.46
2. R2 114.02
3. R1 113.74
PP 113.31
1. S1 113.03
2. S2 112.59
3. S3 112.31

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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