USD/JPY retraces daily losses after robust US-data, approaches 111

The USD/JPY pair, which eased to a daily low at 110.25 before gaining traction after the macro data from the U.S., recovered its daily losses to trade at 110.75, where it's unchanged on the day.

Although today's data were not seen as typical market movers, investors were eager to add to their long USD positions and didn't miss this latest opportunity. June's JOLTS Openings came in at 6.163 million and beat the market expectation of 5.775 million while the IBD/TIPP Economic Optimism index improved to its 5-month high at 52.2 in August from 50.2 in July. The report published by the IBD/TIPP also highlighted that the last reading rose above the 12-month average of 51. On the back of the upbeat figures, the US Dollar Index leapt to a fresh 10-day high at 93.70. At the moment, the index is at 93.67, up 0.4% on the day. 

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Furthermore, major equity indexes started the day higher on Tuesday with the Dow Jones Industrial Average rising to a fresh record high 22,167.63 and the S&P 500 adding 5.5 points, or 0.22%, at the moment. With no more data releases left in the remainder of the session, the pair's price action could continue to be impacted by the DXY movements and the market sentiment.

Technical outlook

The pair could encounter the initial hurdle at 111.00/05 (psychological level/20-DMA) followed by 111.45 (100-DMA) and 112.20 (Jul. 26 high). On the flip side, 110 (psychological level) aligns as the first technical support ahead of 109.60 (Jun. 12 low) and 108.95 (Jun. 14 low). With this latest upsurge, the RSI on the H4 chart started to rise towards the 70 mark, suggesting that the short-term bullish momentum is gathering strength.