FXStreet (Mumbai) – The overnight recovery in the USD/JPY pair lost steam near 20-WMA located at 121.72, and the prices retreated slightly following negative opening in the Japanese stocks.
USD/JPY bounces-off strong support near 50-WMA
Currently, the USD/JPY pair trades 0.15% higher at 121.64, easing-off fresh session highs reached at 121.75 pre=Tokyo open. Fresh bids re-emerged for the major near 50-WMA at 121.10, with the prices rebounding higher thereon, only to find stiff resistance at 121.75 and turned slightly lower near 121.60 region, where it now trades.
The JPY bulls fought back control after a renewed bout of risk-aversion hit markets with Nikkei opening heavily in the red, extending the ongoing rout in the global equities amid tumbling oil prices.
On Wednesday, the USD/JPY pair fell to fresh 1-month lows at 121.07 in response to broad based US dollar weakness. While upbeat Japan’s fundamentals also kept the yen underpinned against its American rival.
Analysts at Bank of Tokyo-Mitsubishi noted, “Certainly the economic data this week will come as welcome relief for the Abe government and perhaps for the BoJ as it continues to express optimism over the outlook for the economy. Speculation remains that the BoJ may coincide the fiscal stimulus signalled by the government with additional monetary easing, perhaps as early as Q1 2016 but the upward revision to Q3 real GDP and the machinery orders data released today suggest that the BoJ can persist with its current stance for now.”
In the day ahead, sentiment on the equities is expected to have major influence on the pair while US weekly jobless claims and import prices may keep the US traders busy after thin trading witnessed in the first half of this week.
USD/JPY Technical levels to watch
The prices turn lower and find the immediate support placed at 122.24 (100-DMA) below which 121.10/07 (50-WMA/ Dec 9 Low) would be tested. To the top-side, the immediate resistance is now placed at hourly 100-SMA & 200-DMA confluence at 121.89. A break above the last, the major could test 122.11 (1h 20-SMA).
(Market News Provided by FXstreet)