FXStreet (Mumbai) - The USD/JPY pair found fresh selling interest around 120.50 region in early Asian hours, as the yen jumped back into the bids mainly on a short-covering rally, after the recent drop.
USD/JPY heading towards 120 levels
Currently, the USD/JPY pair trades -0.16% lower at fresh session lows of 120.33, moving further away from session highs reached at 120.61. The USD/JPY pair extends the corrective slide and now trades around the hourly 200-SMA as the greenback turned negative on the back of profit-taking after the recent strength.
Meanwhile, markets shrugged off the prevalent risk-on environment as the Asian equities track the US stocks higher. Japan’s Nikkei stays closed in observance of Respect-for-the-Aged Day, while Australia’s S & P ASX index gains over 0.50%. The Chinese benchmark index, the Shanghai Composite opened marginally higher, up 0.15% so far.
On Monday, the greenback rallied against the yen as last week's run-for-safe-haven induced by the Fed’s doubts over emerging markets and China's growth prospects evaporated, as markets reacted to the hawkish comments by Fed officials Bullard and Lockhart in their respective speeches.
Looking ahead, with no significant economic releases on cards later today, the pair is likely to get influenced by the USD moves while also tracking the broader market sentiment.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.61 (Today’s High) levels and above which it could extend 121.02 (Sept 17 High). To the downside immediate support might be located at 120 below that at 119.71 (Sept 21 Low) levels.
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