USD/JPY Recovery Stalled Near 109.20, Bulls Exhausted?

USD/JPY Recovery Stalled Near 109.20, Bulls Exhausted?

19 April 2016, 06:10
Roberto Jacobs

USD/JPY Recovery Stalled Near 109.20, Bulls Exhausted?

The USD/JPY pair is seen consolidating its robust recovery from near seventeen-month lows over the past few hours, with the rate hovering around 109 barrier.

USD/JPY trades above all major DMAs

Amid a better risk environment in Asia this Tuesday, the dollar-yen pair keeps range at higher levels, although the overnight recovery appears capped ahead of 109.20 region. At the time of writing, USD/JPY struggles to hold above 109 handle, up 0.23% on the day.

The bulls take a breather and consolidate the heavy gains before the next push higher, as the rebounding Asian stocks continue to lift the sentiment and hence, diminish the safe-haven bids for the yen. However, the upside seems capped largely on the back broad based US dollar weakness, while a retreat in the oil prices also keeps the prices in check. Whilst, the USD index loses -0.08% to 94.37, both crude benchmarks are seen about -0.50% lower.

Meanwhile, the major will continue to track the broader market sentiment ahead of the US building permits and housing starts data, which may provide fresh incentives on the pair. Further, the Japanese trade balance due tomorrow will be also eyed for any impact on USD/JPY.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 109.22/55 (daily high & R1). A break above the last, the major could test 109.77/110.04 (Apr 15 high/ 20-DMA). While to the downside, the immediate support is seen at 108.71/65 (1h 200-SMA/ 10-DMA) and below that at 108.57/50 (Apr 15 low/ psychological levels).


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