USD/JPY Eyeing 109.40 to Confirm Further Up-Move
As European indices stage a minor recovery from lower levels, a slight improvement in global risk sentiment boosted the USD/JPY pair through 109.00 handle to 109.16 session high level.
The US Dollar maintained its mild bid tone against most major currencies on Thursday. The USD/JPY pair also rebounded from a 3-day low level touched during Asian session and has now erased majority of the weakness recorded during the previous session.
The pair also ignored Thursday's upbeat Japanese trade balance data released and continues to drive the pair higher. The pair has now moved back above 20-day SMA and is now within striking distance of a two-week high level of 109.37. Should the pair continue to sustain its strength above 109.00 handle, it is likely to extend its near-term recovery trend.
Technical levels to watch
On a sustained move above 109.40, 2-week high level, the pair seems all set to extend its upward trajectory towards 50-day SMA near 110.50-55 region. A clear break through 50-day SMA would erase the BOJ disappointment led fall, lifting the pair back above 111.00 handle ahead of 111.85-90 late April highs resistance.
Meanwhile on the downside, 5-day SMA near 108.50-45 region, now seems to have emerged as immediate support. Only a decisive drop back below this immediate support might negate the near-term bullish outlook and drag the pair back below 108.00 level towards 107.60-55 support area.