USD/JPY Offered Near 50-DMA, Gives Up 109 Handle
USD/JPY’s recovery from three consecutive sessions of losses faltered just shy of 50-DMA at 109.16, with the major now turning lower below 109 handle, as the risk sentiment appears to have worsened over the last hour.
USD/JPY retesting hourly 20-SMA at 108.86
Having failed to resist above 109 handle, the dollar-yen pair shaved-off gains and fell back in the red zone, as a renewed bout of risk-aversion gripped the markets after the Chinese services PMI deteriorated in May and reinforced China slowdown fears. Fresh selling in the Nikkei 225 is also seen adding downward pressure on the major. At the time of writing, USD/JPY dead flat at 108.96, while Nikkei hovers near daily lows struck 16,554 last minutes.
Further, markets remains wary and refrain from placing big bets on the USD/JPY pair heading to the US NFP release due later today, While renewed weakness in the pair can be also attributed to upbeat Japanese services PMI data, which stood at 50.4 in May, as compared to 49.3 seen previously.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 109.13/16 (daily high/ 50-DMA). A break above the last, the major could test 109.71/84 (20 & 5-DMA). While to the downside, the immediate support is seen at 108.70 (May 18 Low) and below that at 108.50 (psychological levels).