USD/JPY reverses a dip to 111.75, risk-off persists

USD/JPY failed to sustain the recovery and skid back below 112 handle amid resurgence of broad based demand for the safe-haven yen, as both oil and stocks tumble.

USD/JPY stuck in tight range

A renewed bout of risk-aversion hit Europe amid renewed Italian banking concerns and tumbling oil prices, which refueled the safe-haven bids for the yen versus the US dollar, sending the rate to session lows of 111.74, before recovering some ground to now trade at 111.97, still down -1.10% on the day.

Markets remain vigilant in wake of any OPEC-related news flow, which has a strong bearing on the investors’ sentiment, and hence, prefer to hold the safety bets in times of uncertainty and market unrest.

While amid a lack of fundamental drivers in the day ahead, the spot will remain at the mercy of persisting RO-RO sentiment and USD dynamics.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 112.71 (5-DMA). A break above the last, the major could test 113.23 (daily high) and 113.91 (multi-month high) beyond the last. While to the downside, the immediate support is seen at 111.50 (psychological levels) next at 111.15 (1h 200-SMA) and below that at 110.80 (Nov 23 low).