USD/JPY Fails Once Again at 110, Drops Sharply to 109.70
The USD/JPY pair failed several attempts to regain 110 handle over the past few hours, and finally broke to the downside in early Europe, as risk-off sentiment returned to markets amid tumbling oil prices.
USD/JPY eyeing for a test of 50-DMA
The dollar-yen pair lost footing and fell back in the negative territory, as the JPY bulls fought back control amid deteriorating risk conditions triggered by renewed weakness surrounding the oil prices. The yen markets completely ignored the positive close seen in the Japanese stocks, with the Nikkei closing up +0.37%. At the time of writing, USD/JPY trades modestly flat near 109.71 levels.
Markets now await the European open to gauge the risk sentiment and hence, would accordingly place bets on the major. However, upside seems to be favoured for the greenback across the board as we head closer towards the US GDP report and Fed Yellen’s speech due later in the NA session.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 110.15/25 (Daily R1 & May 23 High). A break above the last, the major could test 110.50 (psychological levels). While to the downside, the immediate support is seen at 109.43/42 (50-DMA/ May 26 low) and below that at 109 (round number).