USD/JPY remains capped near 5-DMA amid subdued equities

The recovery in USD/JPY ran into stiff resistances located near 5-DMA at 117.70 levels, prompting a fresh round of selling the major back towards the mid-point of 117 handle.

USD/JPY turns lower once again

The dollar-yen pair met fresh supply last hour and now look to retest daily lows of 117.40, as risk-off moods appear to have gripped markets amid mixed European equities, retreat in oil prices and tumbling treasury yields. Investors flock to safe-havens such as the yen amid widespread risk-aversion, with the Italian banking crisis back in the spotlight.

Further, downside consolidation in the US dollar versus its main rivals combined with upgradation of the economic assessment by the Japanese cabinet office, continue to pose double whammy to the spot.  The major is last seen changing hands around 117.60, down -0.21% on the day.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 118.07 (daily high). A break above the last, the major could test 118.43 (Dec 16 high) and 118.67 (10-month highs) beyond the last. While to the downside, the immediate support is seen at 117.50/40 (psychological levels/ daily low) next at 117.12 (daily S1) and below that at 116.93 (10-DMA).