USD/JPY recovery falters just ahead of 50-DMA, risk-off weighs

The recovery in the USD/JPY from the early Asian drop ran into resistance near 50-DMA at 102.65, sending the rate a tad lower around the mid-point of 102 handle in the last hours.

USD/JPY manages to hold above 5-DMA

Risk-off sentiment remains the underlying the theme in the Asia so far this Monday, underpinning the safe-haven demand for the yen and thus, keeping a check on any recovery attempt. At the time of writing, USD/JPY moved-off highs to trade around 101.53, down -0.18% on the day, while the Nikkei 22 index slumps -1.70% to 16,780 levels.

Moreover, ongoing uncertainty over the US interest rates outlook amid a slew of mixed Fed speaks, leaves the investors confused and also acts as a drag on the US dollar versus its major competitors. This also adds to the persisting weakness behind the USD/JPY pair.

While upbeat core machinery orders data also lend support to the upside in the Japanese currency. Next of relevance for the major remains the Feds speaks due later in the day, as markets seek clarity on Fed’s rate hike prospects this year.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 102.86 (10-DMA). A break above the last, the major could test 103 (round figure). While to the downside, the immediate support is seen at 102.39/31 (5-DMA/ daily low) and below that at 102.14 (20-DMA).