USD/JPY: Bears back in control, eyes a break below 116

The recovery in the USD/JPY pair lost pace just ahead of 116.50 levels, sending the rate back towards 116 handle, as USD selling regained momentum across the board over the last hour.

The pair is last seen exchanging hands at fresh four-day troughs of 116.12, down -0.95% on the day, after having failed to chew offers near 116.55 region. The major dives deeper in the red zone as the European traders gear up for some action and digest yesterday’s less hawkish FOMC minutes, which highlighted Trump’s dependency.

Looking ahead, the major will continue to get influenced by USD dynamics ahead of the key macro updates from the US docket, the ADP jobs and ISM non-manufacturing PMI data. While the main risk event for the spot remains Friday’s NFP report, which will shape up the next direction in the greenback.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 117 (round figure). A break above the last, the major could test 117.23 (1h 200-SMA) and 117.49 (daily pivot) beyond the last. While to the downside, the immediate support is seen at 116 (zero figure) next at 115.62 (daily S3) and below that at 115.50 (psychological levels).