USD/JPY bounces-off multi-month lows near 105.50

By FXStreet The USD/JPY pair finally halted its downward spiral and recovered some ground, with the bulls now attempting a tepid-bounce towards 106 handle.

USD/JPY: Bears take a breather

The yen is losing some footing against its American counterpart, allowing a minor recovery in the USD/JPY pair from fresh more than eighteen-month lows. At the time of writing, USD/JPY recovers to 105.80, still down -0.60% on the day.

The major fell sharply to the lowest levels since Oct 2015 at 105.55 after negative sentiment around the European indices triggered a renewed risk-aversion wave across the markets and fanned the demand for the safe-haven yen. The European equities are now seen stabilizing after the initial steep losses, ranging lower between -1.50% to -1.90%.

Markets now await the Fed speak due later today ahead of the US ADP report and factory data lined up for release tomorrow.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 106 (round number). A break above the last, the major could test 106.62/76 (5-DMA/ daily R1). While to the downside, the immediate support is seen at 105.50 (Oct 2014 levels) and below that at 105 (key psychological levels).
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Source:: FX Street