USD/JPY trims losses above 111.00 as Wall Street recovers

The Japanese yen weakened in the market amid a rally in US stocks and a decline in US bonds. USD/JPY recovered from multi-month lows and climbed toward 111.20. Earlier the pair bottomed at 110.61, hitting the lowest level since mid-November. 

The recovery of the dollar started after the beginning of the American session. In Wall Street, the Dow Jones is up 0.34% and the Nasdaq gains 0.28%. The 10-year yield rose from 2.391% to 2.425%. Analysts are watching closely negotiations in the US Congress regarding the health bill. 

Technical outlook 

USD/JPY continues to move with a bearish bias, but the pair appear to be forming a short-term base around 110.60/70. A consolidation below that area could open the doors for an extension of the decline.

If the recovery continues, the pair could face resistance at 111.25 (American session high), 111.55/60 (daily high) and 111.80 (Mar 22 high). On the downside, support could be located at 110.60/70 (daily low), 110.00 and 109.80 (Nov 16 high).