USD/JPY reverses earthquake-led slide, eyeing to retake 111.00

The USD/JPY pair reversed Japanese earthquake-led slide to 110.27 level and has now moved into positive territory, aiming back to reclaim 111.00 handle.

Currently trading around 110.80-85 region, testing daily peak, the pair caught fresh bids at lower level after the Japan Meteorological Agency receded fears of tsunami in Japan’s Pacific coast. The pair initially dropped to test 5-day SMA support after a 7.3 magnitude earthquake shook Tokyo and subsequent issuance of tsunami warning for much of the nation's northern Pacific coast.

Meanwhile, the prevalent risk-on mood was seen denting the Japanese Yen's safe-haven appeal. This coupled with rising prospects of an eventual Fed rate-hike action at its December meeting continues to underpin the greenback, restricting further slide and helping the major to remain within striking distance of a multi-month highs touched yesterday. 

Later during NA session, US existing home sales data would be looked upon to grab some short-term trading opportunities ahead of Wednesday's key releases from the US - monthly durable goods orders and FOMC meeting minutes.

Technical levels to watch

Immediate upside resistance is pegged at 111.00 round figure mark above which the pair is likely to aim towards 5-1/2 month high resistance near 111.35 area, which is closely followed by May high resistance near 111.45 level. On the downside, renewed weakness below 110.50 level might now drag the pair below 5-day SMA support near 110.25 region (session low) towards 110.00 psychological mark.

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