USD/JPY unable to extend recovery, dips back below 107.00

By FXStreet The USD/JPY pair’s early Asian session spike to 107.45 got sold into and the pair has now dropped back below 107.00 handle, shattering traders’ expectations of extending Tuesday’s recovery.

After being butchered to its lowest level since Oct. 2014, the pair seems to have some support at lower levels. On Tuesday, the pair witnessed a sharp short-covering rally that extended during early Asian session on Wednesday. The pair, however, failed to build on to the early momentum and erased majority of its gains to currently trade near 106.85 level.

As the intensity of US Dollar selling seems to have diminished ahead of the US ADP jobs report and ISM non-manufacturing PMI, the pair seems more likely to stabilize at current levels. For the day, only a break-out from Wednesday’s trading range would trigger the next leg of move for the pair.

Technical levels to watch

Below today’s low of 106.50, traders would be eying Friday’s closing low level support near 106.35 level. A sustained weakness back below Friday’s close now seems to trigger a fresh bout of selling pressure, which could drag the pair back towards 105.55-50 support area.

On the upside, strength above 107.00 mark might continue be capped at day’s …read more

Source:: FX Street