USD/JPY Struggling to Regain Momentum Above 109.00 Handle
Following its reversal on Friday from 109.50 resistance area, the USD/JPY
pair now appears to struggle in moving back above 109.00 handle. On
Monday, the pair remained capped at 109.00 handle, but still holds its
near-term trading range, to currently trade at 108.75.
The pair on Friday erased all of its day's gains to 109.55, despite of
stronger-than-expected US retail sales data, and dropped back into
negative territory on risk-aversion trade led by a sell-off in US
equities. The pair, on Monday attempted a recovery to 109.00 handle on
improving risk sentiment across global equity markets, but now seems to
face some immediate resistance near this round figure mark.
Investors this week will focus on key drivers, Japanese GDP print along
with the Fed minutes and CPI data from the US, in order to determine the
near-term direction for the pair.
In the meantime, a slight improvement in equity markets is likely to
assist the pair to register some minor gain amid quiet trading
conditions.
Technical levels to watch
On a sustained move beyond 109.00 handle, bulls would be immediately
eying to capture Friday’s high resistance of 109.55, which if conquered
should aim to test 50-day SMA resistance near 110.30-35 area.
On the downside, drop below 108.40 immediate support might trigger a
sharp slide to 107.95-90 horizontal support, which if broken seems to
drag the pair further towards 107.25-20 support area.
