USD/JPY Swings Back Above 111 on Sales-Tax News-Led Uncertainty

USD/JPY Swings Back Above 111 on Sales-Tax News-Led Uncertainty

31 May 2016, 11:51
Roberto Jacobs
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USD/JPY Swings Back Above 111 on Sales-Tax News-Led Uncertainty

Fresh selling seen in the Japanese currency over the last hour, lifted USD/JPY back on the bids above 111 handle, while markets now await the US economic data for further incentives.

USD/JPY finds support above daily pivot at 110.86

The bulls fight back control as we progress towards the mind-European session, with the Japanese currency once again sold into increasing uncertainty surrounding Japan’s sales tax delay announcement, while reports that Japan's Lower House rejected motion of No Confidence in ruling government, also weighed somewhat on the local currency.

Moreover, the US treasury yields remain on a solid footing heading into the US core PCE and consumer confidence data due later in the NA session and thus, keep the downside capped in the USD/JPY pair. At the moment, USD/JPY trades modestly flat at 111.07, reversing a dip to 110.90, session lows.

Apart from the US macro releases, the sentiment on the global equities and oil markets will be closely monitored for further impetus on the major.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 111.36/45 (April 5 & May 30 High). A break above the last, the major could test 111.91 (100-DMA). While to the downside, the immediate support is seen at 110.55/54 (5-DMA/ Daily low) and below that at 110.27/23 (daily S1/ 10-DMA).


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