USD/JPY: Bears loosen grip, re-takes 117 amid light trading

The USD/JPY pair is seen making minor-recovery attempts in early Europe, as the European traders gear up for the first trading day of 2017, preferring to hold the US currency amid better US economic and political prospects.

Moreover, higher inflation expectations in the US economy in wake of Trump’s spending on infrastructure in a bid to revive the US economic growth, upped forecasts for treasury yield this year, which in turn is expected to keep the sentiment around the USD/JPY pair buoyed.

The pair is last seen exchanging hands at 116.902, down -0.05% on the day, reverting towards daily tops at 117.07. Nothing of note for the major in the day ahead, and hence, focus shifts US dataflow and FOMC minutes lined up for release in the first week of the New Year.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 117.01/07 (20-DMA/ daily high). A break above the last, the major could test 117.22 (Dec 30 high) and 117.50 (psychological levels) beyond the last. While to the downside, the immediate support is seen at 116.45 (daily S3) next at 116.05 (2-week lows) and below that at 115.80 (psychological levels).