USD/JPY: Yen back in demand, eyes 50-DMA

The USD/JPY pair witnessed a sharp reversal this Tuesday, having run into a strong resistance placed near 106.30 region amid a mild risk-averse market conditions.

USD/JPY sold-off in Asia

The JPY bulls fought back control and regained lost footing, knocking-off USD/JPY once again below 106 handle, with no catalyst behind the move. At the time of writing the USD/JPY pair is seen recovering to 105.78, having retreated slightly from a dip to 105.69 in the last hour, and recording a -0.30% loss so far this session.

The major dropped sharply solely on a profit-taking slide as markets preferred to lock-in gains after the rate failed to take-out the key upside barrier around 106.30 region. While mixed sentiment persisting amidst the Asian stock markets also kept the USD/JPY pair in the red. Meanwhile, the Nikkei 225 index holds gains to trade around 16,570 points, up +0.40% on the day.

Next of note for the major remains the US housing data, while the prevalent risk trends will continue to drive the major.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 106.50 (Multi-week highs). A break above the last, the major could test 106.85 (post-Brexit high). While to the downside, the immediate support is seen at 105.50/48 (5 & 50-DMA) and below that at 105.04 (Jul 18 low).