USD/JPY stalls recovery from 4-week lows, back below 111.00

The recovery in the USD/JPY lost steam near 111.20 region after the European stocks opened on a mixed note, re-igniting risk-off moods and knocking-off the rate back below 111 handle.

The JPY bulls regained footing, as a renewed risk-aversion wave gripped the European markets, with markets reporting to safety-nets such as the Yen. Moreover, investors remain cautious ahead of Wednesday’s FOMC policy decision, which is very much likely to disappoint the hawks.

Furthermore, renewed USD selling across the board also collaborated to the fresh move lower in the spot, as the European traders continue to sell-off the buck amid looming US political concerns.

Next of relevance for the major remains the US Markit services and manufacturing PMI releases due later in the NA session.

USD/JPY Technical levels                 

To the topside, a daily close above 5-DMA at 111.36 would shift risk in favor of a re-test of 111.98/112 levels (10-DMA/ round figure) beyond which 112.71 (20-DMA) would be back on sight. A break below 110.50 (psychological levels) would open doors for 110 (zero figure). A break lower would yield a test of 109.60 (Jun 12 high).