USD/JPY stays in restoration mode for now, eyes on US knowledge later

The overnight high touched 148.22 for a brief moment but price action is settling back under the 148.00 level for now. The rebound in the pair since the middle of last week comes as the unwinding of carry trades have eased. The overall risk mood in broader markets also improved concurrently, allowing for USD/JPY buyers to dip their toes into the water again.

That said, the recovery is still not all too convincing yet. Here’s a look at the near-term chart and how the key levels there are also playing a role:

Amid the rebound back above 145.00, buyers have been holding at around the 100-hour moving average (red line) to keep the bounce going. That is the same case a little earlier today as well. The confluence of that and the 200-hour moving average (blue line) is now seen at 146.84-97. That is the key near-term region to be mindful of for USD/JPY price action now.

Hold above and buyers will stay in near-term control but break below and sellers can start to take aim at 145.00 again.

For trading today, the key risk event to watch will be more data from the US. We will be getting PPI figures and they might offer a bit of a taste of what’s to come for tomorrow. Given how markets are rather sensitive to US data at the moment, it could be enough to be a trigger event for risk on either side.