USD/JPY’s unstoppable bullish run from near 112 handle ran out of steam just below 20-DMA at 113.41, and the major eased from there although stays above 113 handle.
USD/JPY sees more than 1 big figure recovery
A major turnaround in risk conditions towards Tokyo close and the subsequent risk-on trades extended into Europe helped the dollar-yen pair stage a solid recovery. The European equities snapped previous losses and rebounded 0.50% to 1.50%. While the oil prices regained momentum and extended higher, with the WTI rising 1.40%, while the Brent gains 0.85%.
The major remains firmer this session on expectations of improving manufacturing sector activity in the US last month. The ISM manufacturing PMI is expected to have improved to 48.5 in Feb versus 48.2 last, while PMI gauge from Markit is expected to remain unchanged at 51.0. Meanwhile, the sentiment on the Wall Street will also play a major role.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 113.34/41 (daily high/ 20-DMA). A break above the last, the major could test 114 (round number/ Feb 29 High). While to the downside, the immediate support is seen at 112.86/76 (10-DMA/ 1h 200-SMA) and below that at 112.20/16 (Feb 29 & Daily Low).