USD/JPY Swings Back to 113.60 as Nikkei Rebounds
The bulls found solid support near 5-DMA at 113.17 and swung back higher into gains, now taking on the recovery towards 114 handle.
USD/JPY rebounds in tandem with Nikkei
The dollar-yen pair is back on the recovery mode after a brief stint to the downside, and seems to have reversed almost half the ECB-led slide thus far. The bulls regained poise and broke above the mid-point of 113 handle as risk-on trades returned to markets along with a strong pullback seen in the Japanese stocks. At the time of writing, USD/JPY jumps 0.31% and trades near session highs reached at 113.59 last hour, while Japan’s Nikkei rises 0.85% higher versus -0.90% seen previously.
The resurgence of risk-on environment combined with a minor-recovery seen in the US dollar, aids the bounce in the USD/JPY pair. The USD index gains 0.08% to 96.30, extending the recovery from 95.94 levels. The greenback plummeted to fresh four-week lows against its six major peers on the back of the extensive rally witnessed in the EUR/USD pair seen on Thursday after Draghi’s presser.
Next on tap for the major remains the Chinese data flow this week, while the main risk events are on the cards next week, with both the BOJ and Fed policy decisions eagerly awaited.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 113.99/114 (daily R1/ psychological levels). A break above the last, the major could test 114.45 (Mar 10 High). While to the downside, the immediate support is seen at 112.80/79 (daily low) and below that at 112.44/23 (Mar 8 & 9 Low).
(Market News Provided by FXstreet)
