USD/JPY Climbs Back Above 109 Handle as Nikkei Trims Losses

USD/JPY Climbs Back Above 109 Handle as Nikkei Trims Losses

2 June 2016, 07:31
Roberto Jacobs
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USD/JPY Climbs Back Above 109 Handle as Nikkei Trims Losses

Fresh bids emerge near 108.85 region, allowing a tepid-bounce in the USD/JPY pair above 109 handle, also as risk-off moods cool-off somewhat amid a recovery in the Japanese stocks.

USD/JPY re-attempts 50-DMA

The dollar-yen pair trims losses and now tires to extend recovery above 50-DMA barrier located at 109.21, as the bulls were rescued by stalled selling in the Nikkei 225, with the Japanese index moving-off session lows. At the time of writing, USD/JPY trades at 109.08, still down -0.33% on the day, while Nikkei drops -1.78% versus -2.30% seen earlier.

Markets continue to digest the latest sales tax hike delay decision made by Abe and assess its impact on the overall Japanese economic growth, as focus now shifts towards the ECB decision and US jobs data for further momentum.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 109.69/78 (20-DMA/ daily pivot). A break above the last, the major could test 110 (round number/ 10-DMA). While to the downside, the immediate support is seen at 108.70 (May 18 Low) and below that at 108.50 (psychological levels).

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