USD/JPY looks to regain 111.50, despite rising VIX

The bears continue to guard the 111.50 barrier, restricting minor-recovery attempts in USD/JPY, despite a renewed strength seen in the US dollar across the board. The USD index reverses Friday’s losses and resumes last week’s bullish momentum, backed by recent series of upbeat US fundamentals and hawkish Fedspeaks.

However, the gains may remain capped by the side-ways movement seen in the treasury yields, while rising VIX, which indicates risk-off trades persisting in the markets, also keeps the prices in check. The CBOE Volatility Index (VIX) jumps +2.10% to 12.63, flirting with daily tops.

Next of relevance for the major remains the US manufacturing reports from ISM and Markit, which will be reported in the NA session. Meanwhile, the yen traders were little impressed by the Japanese Tankan manufacturing and non-manufacturing index figures released earlier in Asia this Monday.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 111.61 (classic R2/ Fib R3). A break above the last, the major could test 112.18 (20-DMA) and 112.89/113 (50-DMA/ round figure) beyond the last. While to the downside, the immediate support is seen at 111.17/11 (daily pivot/ classic S1) next at 110.91/88 (Mar 30 low/classic S3) and below that at 110.69/50 (Mar 30 low/ psychological levels).