USD/JPY Bulls Fighting for Control, 107 Back on Sight?
The recovery in the Japanese equities offers a fresh boost to the USD/JPY pair, now pushing the prices back towards daily highs near 106.70 region.
USD/JPY bounces-off fresh eighteen-month lows
The JPY bulls took a breather from their recent upsurge, with USD/JPY now correcting a small portion of last week’s massive decline induced by the BOJ’s surprise. Last Thursday, BOJ made no changes to its monetary policy settings, disappointing markets’ expectations of more BOJ easing and therefore,
triggering a fresh risk-off wave across the financial markets. At the moment, the major hovers around 106.60, recovering slightly from fresh multi-month lows struck at 106.16, up 0.11% on the day.
Looking ahead, with Japan’s markets closed for rest of the week, focus remains on the US docket, with the key US employment data on the cards later this week. In the meantime, the sentiment around the global equities will play a key role ahead of the US ISM manufacturing PMI report.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 107 (round number). A break above the last, the major could test 107.63/80 (5-DMA/ 1h 50-SMA). While to the downside, the immediate support is seen at 106.16/00 (Multi-month lows) and below that at 105.50 (Oct 2014 levels).