FXStreet (Mumbai) – The US dollar erased mild gains and turned lower versus the Japanese currency in the mid-Asian trades, sending USD/JPY closer towards 123 handle. The major extends its weakness as the US dollar remains broadly sold-off following the recent FOMC decision and Fed Chair Yellen’s comments which urged focus on the pace of the rate increase rather than the exact timing of lift-off.
USD/JPY trades below 10-DMA
Currently, the USD/JPY pair trades -0.14% lower at 123.25, retracing from 123.58 session highs. The USD/JPY pair remains pressured largely on broad based US dollar weakness after the dovish FOMC statement and Yellen’s comments. The US dollar index, measuring the relative strength of the greenback against a basket of six major currencies trades -0.12% lower at 94.37.
Fed Chair Yellen noted, “Economic conditions do not yet warrant an increase in the federal funds rate,” “My colleagues and I would like to see more decisive evidence that a moderate pace of economic growth will be sustained.”
Moreover, with no progress reached on Greece so far, the yen remains broadly supported on the back of increased bids for safe-haven assets such as gold, treasuries, yen etc.
Meanwhile, traders now shift their attention towards a host of key US data flow including, US CPI, weekly jobless claims, current account and Philly Fed Manufacturing gauge, which may provide fresh cues on the US dollar moves.
USD/JPY Technical Levels
To the upside, the next resistance is located at 123.53 (10-DMA) levels and above which it could extend gains 124 (20-DMA) levels. To the downside immediate support might be located at 123.10 (June 15 Low) below that at 122.60 (June 11 Low) levels.
(Market News Provided by FXstreet)