USD/JPY rebounds in tandem with European stocks

The US dollar fought back control against its Japanese peer post-European open, sending USD/JPY back beyond the mid-point of 109 handle.

USD/JPY eyes 5-DMA at 109.82

A major turnaround in the risk conditions during the European session, following a bounce seen in the European equities, bolstered the demand for the risk currency USD and therefore, pushed USD/JPY back to fresh daily tops. Although the major quickly faded a spike to 109.65 highs, as lower oil prices continue to cap the risk-on trades across the markets. At the time of writing, USD/JPY trades at 109.55, still up 0.27% on the day.

Moreover, latest headlines hitting the wires from the Japanese officials over G7 meetings’ discussion and warning against Japanese fx intervention, continue to keep the JPY traders busy. Looking ahead, the sentiment surrounding oil and stock market is likely to play a crucial role, besides US new home sales data will be closely watched for further USD moves.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 109.82 (5-DMA). A break above the last, the major could test 110 (round number). While to the downside, the immediate support is seen at 109.00 (round number) and below that at 108.58 (20-DMA).