USD/JPY Regains Momentum, Back Above 107 Handle

USD/JPY Regains Momentum, Back Above 107 Handle

4 May 2016, 05:01
Roberto Jacobs

USD/JPY Regains Momentum, Back Above 107 Handle

The USD/JPY pair is once again taking on the recovery above 107 handle, reversing a brief dip to session lows struck at 106.53, on the back of a minor-pullback in the Asian equities, while the absence of the Japanese traders exaggerates the moves in the major.

USD/JPY re-takes 107.45

The dollar-yen pair regained momentum and resumed its recovery mode from eighteen-month troughs as the selling across the Asian markets appear to have stalled amid thin trades and limited volatility as the Japanese markets remain closed on account of public holidays until Friday. At the time of writing, USD/JPY trades at 107.09, recording a 0.38% gain on the day, while Australia’s ASX 200 now drops -0.95% versus -1.20% seen earlier and the Chinese equities trade marginally lower.

Earlier this session, the major spiked to daily highs at 107.45 as stops triggered after the rate surpassed 107 barrier. While markets speculated that the move could be in response to some BOJ intervention, although nothing could be confirmed on the same and it looked more of stops triggered above 107 levels.

With the US dollar swinging back higher across board, the ongoing recovery mode is likely to extend ahead of the US ADP jobs. ISM non-manufacturing PMI and factory orders data lined up for release later in the NY session.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 107.45/50 (daily high/ psychological levels). A break above the last, the major could test 108/108.20 (Apr 29 High). While to the downside, the immediate support is seen at 106.58/53 (5-DMA/ daily low) and below that at 106 (round number).


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