USD/JPY: Supply capping recovery near 5-DMA

By FXStreet FXStreet (Mumbai) – USD/JPY keeps its recovery mode intact from a downward spike to 116.70 in opening trades, now consolidating below 5-DMA placed at 117.41.

USD/JPY gains capped by falling Japanese stocks

Currently, the USD/JPY pair trades 0.18% at 117.25, unable to extend beyond 117.35/40 region. The major is making recovery attempts towards mid-Asia, although lacks follow-through as mixed trading on the equities fails to lift overall sentiment, dented earlier by the free-fall in oil prices.

USD/JPY kicked-off this week on the bids, however, the upside remained short-lived and the prices fell to 116.72 lows, as the news of Western sanctions lifted on Iran sparked a fresh sell-off in oil that spooked markets once again, with traders flocking to the safe-haven, Yen.

However, the losses were quickly reversed and the major embarked upon the recovery back onto 117 handle after the latest measures by China, announced over the weekend, to stabilize offshore yuan markets boosted risk-sentiment somewhat.

Meanwhile, the Chinese markets are in the green, with the Shanghai Composite up +0.36%, while Japan’s Nikkei drops -1.74% and Australia’s S&P/ASX 200 loses -0.87%.

In the day ahead, light trading is expected as the US markets will be closed on a national holiday, while the focus …read more

Source:: FX Street