USD/JPY: Will it regain 107 handle amid risk-off?
- Resurgent USD demand aids the recovery.
- Hawkish Fed minutes overshadow Syria tensions?
The USD/JPY pair is seen making tepid recovery attempts to reclaim the 107 handle amid persisting risk-off market profile, as aggressive buying seen around the US dollar versus its major peers offers the much-needed to support to the bulls.
The sentiment around the greenback remains lifted on the back of a more hawkish bias seen in the FOMC minutes released a day before, in which the Committee was optimistic the US inflation would reach the target in the coming months. This means the Fed could embark upon an aggressive tightening policy should the inflation meet the central bank’s 2% target.
However, the bears continue to guard the 107 barrier, as the Yen continues to derive some support from the negative sentiment around the global equities, as US-Russia war fears escalate over Syria.
The focus will continue to remain on the developments surrounding the Syrian tensions, as investors gear up for the US jobless claims data due on the cards at 1230 GMT.
USD/JPY levels to watch
Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers, notes: “Falling thick daily cloud continues to cap upside attempts and weighs, but the downside was so far contained by rising 10SMA (106.75) and limited as immediate threats of US attack eased, reducing safe-haven demand. The near-term action is holding within triangular narrowing range with key points at 106.75 (10SMA) and 107.16 (daily cloud base). Daily MA’s (10/20/30) are in bullish setup, with strong momentum studies keeping the pair supported. Res: 106.70; 107.05; 107.16; 107.50 Sup: 106.75; 106.40; 106.31; 106.00.”