FXStreet (Mumbai) – USD/JPY faded a spike to session highs in the European morning and now recedes near the mid-point of the 120 handle, as traders locked-in gains viewing the recent US dollar run up as overdone.
USD/JPY capped by 20-DMA
Currently, the USD/JPY pair trades 0.61% firmer at 120.55, retreating from 120.74 – fresh weekly highs. The USD/JPY pair through fresh offers near 120.75 levels where the 20-DMA lies, sending the pair lower near 120.50 levels.
Moreover, the major eased-off highs as markets resorted to profit-taking on their USD longs after the recent risk-on sentiment driven USD rally was seen as excessive ahead. While markets remain cautious ahead of key China CPI data due to be released tomorrow.
However, the bid tone around the USD/JPY pair is expected to remain untouched amid cooling concerns over the Chinese economic prospects after the stimulus announcement, which once again reinforces Fed Sept rate hike bets.
Later today, the major will be influenced by the risk-off/on sentiments as markets await fresh cues from the US calendar with only the JOLTS Job openings on the cards.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.74 (Today’s High) levels and above which it could extend 121 (Psychological Levels). To the downside immediate support might be located at 119.62 (Sept 3 Low) below that at 119.20 (Sept 2 Low).
(Market News Provided by FXstreet)