USD/JPY sticks to recovery gains, but remains capped below 111.00 handle

• Goodish USD recovery helps bounce off lows.
• Positive US bond yields supportive of the move.
• Risk-off environment capping additional gains.

The USD/JPY pair held on to its strong recovery gains, with bulls now eyeing a move beyond the 111.00 handle for fresh impetus.

After an initial dip to fresh 4-month lows, near the 110.20 region, the pair staged a smart recovery and so far, seems to have snapped seven consecutive days of losing streak amid reviving US Dollar demand.

A goodish pickup in the US Treasury bond yields, to some extent, helped ease the prevalent strong bearish pressure surrounding the greenback and supported a minor rebound from closer to the key 110.00 psychological mark.

Meanwhile, a mildly negative trading sentiment around European equity markets underpinned the Japanese Yen's safe-haven demand and was seen capping additional gains, at least for the time being.

Today's relatively thin US economic docket, featuring the release of industrial production and capacity utilization data, is unlikely to act as a game changer and hence, the pair remains at the mercy of USD price dynamics and broader market risk sentiment.

Technical levels to watch

A sustained break through the 111.00 handle is likely to trigger a short-covering bounce and lift the pair back towards the very important 200-day SMA hurdle near the 111.65-70 reigon.

On the flip side, weakness back below 110.40 level might continue to find some support near the 110.00 region, which if broken could drag the pair towards its next support near the 109.70-65 zone.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.