USD/JPY: Another attempt above 108 to fill in bearish gap?

The USD/JPY pair is seen struggling to extend the recovery from near 2016 lows since Tokyo open and now attempts another run above 108 handle to close the bearish opening gap.

USD/JPY forms higher lows on hourly charts

The dollar-yen pair is seen consolidating the downside, after having opened gap down nearly 50-pips after the Asian traders react negatively to the failed Doha output freeze talks last weekend, sending oil prices sharply lower along with the Asian indices. A renewed sell-off across the financial markets triggered risk-off moods and heightened the demand for safety bets, thereby propping up the bids for the JPY. At the time of writing, USD/JPY attempts recovery around 108.10, still down -0.64% on the day.

Both crude benchmarks are down over 4%, while among the Asian equities, the Nikkei sinks -3%, the Shanghai Composite index slumps -1.31%, while Australia’s ASX 200 drops -0.29%.

Meanwhile, the recovery appears fragile as traders remain on the back foot, still digesting the Doha meeting news, and refrain from creating fresh positions in wake of the persistent risk-off sentiment and a data-dry US macro calendar.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 108.36/47 (daily R1/ 10-DMA). A break above the last, the major could test 108.73/88 (5-DMA/ 1h 200-SMA). While to the downside, the immediate support is seen at 107.89/85 (daily S1 & low) and below that at 107.61 (Apr 11 low).