USD/JPY Corrects Lower to Sub-111.00 Levels

USD/JPY Corrects Lower to Sub-111.00 Levels

31 May 2016, 10:29
Roberto Jacobs
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USD/JPY Corrects Lower to Sub-111.00 Levels

The greenback is now receding further vs. the Japanese currency, sending USD/JPY to test the area below the 111.00 handle.

USD/JPY looks to US docket

The pair’s upside momentum has once again failed ahead of the 111.30/40 band, or multi-week peaks, boosted by market chatter regarding the Japanese government could delay the implementation of the sales tax hike (probably until October 2019), prompting further weakness in JPY.

In addition, speculations on a potential rate hike by the Fed at some point during the summer keep lending support to the greenback, although current month-end flows seem to be limiting gains in USD.

USD/JPY levels to watch

As of writing the pair is losing 0.17% at 110.93 facing the immediate support at 109.97 (55-day sma) ahead of 109.24 (20-day sma) and then 105.52 (2016 low May 3). On the other hand, a breakout of 111.45 (high May 30) would open the door to 111.92 (high Apr.28) and finally 112.41 (100-day sma).


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