USD/JPY Flat at 111.15, Eyeing US Economic Data for Fresh Triggers

USD/JPY Flat at 111.15, Eyeing US Economic Data for Fresh Triggers

The USD/JPY pair found fresh buyers at Asian session through level of 110.80, boosting the pair to 111.35 before retracing back to currently trade near 111.20, nearly unchanged from Monday's closing level.

Expectation of a Fed rate-hike in June/July continues to boost the pair higher. Moreover, global risk-on rally across equity markets also seems to dent the safe-haven appeal of the Japanese currency. 

Even better-than-expected Japanese economic data also failed to extend any support to the broadly weakening Yen. Economic data released from Japan showed unemployment rate in April holding steady at 3.2% while household spending dropped 0.4% y-o-y, which was lower than expectations of 1.3% drop. Meanwhile, the most promising data came in terms of industrial production data that printed a growth of 0.3% as compared to expectations of a contraction by 1.4%. 

Investors now turn their focus to economic releases from the US, especially the release of US core PCE index, which is the Fed's preferred gauge of inflation. 

From technical perspective, the pair on Monday extended its recent trading range break-out and climbed to a fresh 5-week high level of 111.45. A follow through strength above 11.45-50 area should pave way for further near-term appreciating move for the pair.

Technical levels to watch

From current levels, bulls might aim to conquer 111.45-50 resistance area, above which the pair seems all set to extend its upward trajectory beyond 112.00 handle, towards testing 100-day SMA resistance near 112.40 region.

Meanwhile on the downside, weakness back below day's through support near 110.80 seems to get extended towards the recent trading range break-out point turned support near 110.60-55 area. Failure to hold this resistance turned support is likely to continue dragging the pair back towards testing its next major support near 110.15-10 zone.