FXStreet (Mumbai) - The USD/JPY pair founds fresh bids just below 119.50 levels, where the daily S1 coincides, and attempted a tepid-recovery amid persisting risk-off moods.
USD/JPY recovers to hourly 20-SMA
Currently, the USD/JPY pair trades modestly flat at 119.70, recovering from strong support located near 119.50 – confluence zone of daily S1 and Oct 13 Low. USD/JPY’s 20-pips retracement from lows can be partly attributed to the sharp recovery seen in the US treasury yields in Asia. The shorter as well as the longer duration yields on the US treasuries trimmed losses and recovers to 0.621% (-0.64%) and 2.046% (-0.45%) respectively.
However, the recovery seems short-lived as the yen bulls remain in control amid tepid Chinese data and sinking Asian indices, thus fuelling further risk-aversion.
In the day ahead, the major will remain influenced by the key US retail sales and PPI numbers while the broader market sentiment will also play a crucial role.
USD/JPY Technical levels to consider
To the upside, the next resistance is located at 119.83-119.90 (H1 R3 & hourly 50-SMA) beyond which 120.08 (20-DMA) could be tested. Above the last, the pair could climb further towards 120.34/41 (daily R2 & 50-DMA). To the downside immediate support might be located at 119.50 (daily S1), below which 119.22-21 (Sept 29 & 24 Lows) could be exposed. A breach of the last, the pair could drop to 118.83 (Sept 8 Low) levels.
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