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25 Jan 2016
USD/JPY: Yen trims gains, side-lined near 118.40
FXStreet (Mumbai) - The USD/JPY pair stalls its recovery from lows just shy of the mid-point of 118 handle, while the yen keeps the bid tone alive amid widespread risk-aversion.
USD/JPY capped below 118.50
The USD/JPY pair trades -0.33% lower at 118.39, unable to extend beyond 118.46 levels. The yen continues to remain in demand as sentiment remains sour on the back of wavering European stocks and negative oil prices. Germany’s DAX trades muted around 9,769, while the pan-European benchmark, the Euro Stoxx 50 drops -0.30% to 3,021.
Moreover, USD/JPY remain pressured after Friday’s CFTC report showed that yen bullish bets reached four-year highs as markets are pricing-out easing at BOJ’s policy meeting this week against the backdrop of the recent global market turmoil.
Further, falling expectations that the Fed will go for four rate hikes this year also weighed on the buck and dragged the prices lower. As per Reuters poll, economists now forecast three hikes in 2016 rather than the four initially floated by the Fed.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 119 (round number). A break above the last, the major could test 119.17 (Jan 6 High). While to the downside, the immediate support is located at 118.18/08 (Daily Low/5-DMA) below which 117.75 (10-DMA) would be tested.
USD/JPY capped below 118.50
The USD/JPY pair trades -0.33% lower at 118.39, unable to extend beyond 118.46 levels. The yen continues to remain in demand as sentiment remains sour on the back of wavering European stocks and negative oil prices. Germany’s DAX trades muted around 9,769, while the pan-European benchmark, the Euro Stoxx 50 drops -0.30% to 3,021.
Moreover, USD/JPY remain pressured after Friday’s CFTC report showed that yen bullish bets reached four-year highs as markets are pricing-out easing at BOJ’s policy meeting this week against the backdrop of the recent global market turmoil.
Further, falling expectations that the Fed will go for four rate hikes this year also weighed on the buck and dragged the prices lower. As per Reuters poll, economists now forecast three hikes in 2016 rather than the four initially floated by the Fed.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 119 (round number). A break above the last, the major could test 119.17 (Jan 6 High). While to the downside, the immediate support is located at 118.18/08 (Daily Low/5-DMA) below which 117.75 (10-DMA) would be tested.