The USD/JPY pair struggled to build on to its tepid recovery move and has now retreated back to mid-112.00s amid subdued US Dollar price action.
Mixed signals from Friday’s US January employment details, especially lackluster wage growth, did little to boost March Fed rate-hike expectations and reignite the US Dollar rally. Retracing US treasury bond yields seems to be reinforcing the presumption and has failed to assist the pair to register any meaningful recovery.
However, a mildly positive sentiment around equity markets is weighing on the Japanese Yen’s safe-haven appeal and lending some immediate support to the major, just above last week’s two-month lows support near 112.00 handle.
In absence of any major market moving releases, the pair is likely to take clues from broader market risk sentiment and track the price-action in the US treasury yields.
Technical levels to watch
On the downside, 112.00 round figure mark remains an immediate strong support to defend, which if broken decisively is likely to accelerate the slide towards 111.35 horizontal support, with some intermediate support near 111.65-60 region.
Meanwhile on the upside, sustained recovery above 112.70-75 zone is likely to boost the pair beyond 113.00 handle towards an important hurdle near 113.25 region. A convincing break through 113.25 resistance would pave way for an immediate spike to 113.75-80 resistance, en-route 114.00 handle.
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