USD/JPY retraces Earthquake-slide, 111 back on sight

After a slew of soothing comments from the Japanese officials on the earthquake, the USD/JPY’s recovery is seen picking-up pace, now climbing back towards 111 handle.

USD/JPY recovers to 5-DMA at 110.71

The dollar-yen pair slumped more-than one big figure from half-yearly highs to 110.28, after news of a 7.4 magnitude earthquake and tsunami warnings broke the wires in early Asia, boosting the safe-haven and repatriation flows in the yen.

However, the major quickly recovered ground and now looks to regain 111 handle as the Japanese officials came on the wires and calmed nerves, noting that there has been no immediate danger of radiation leak is seen from Fukishima following the earthquake, while adding that the Japanese government is prepared to take necessary measures to deal with the Fukushima earthquake.

The major is last seen exchanging hands at 110.69, down -0.11% on the day, testing 5-DMA upside barrier located at 110.71. While the Japanese benchmark, the Nikkei 225 index turns positive to trade near session highs of 18,139 points.

Next of note for the major remains the US existing home sales and regional manufacturing data, while persisting risk trends and USD price-action will be also closely followed for further moves in USD/JPY.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 111.00 (round number). A break above the last, the major could test 111.46 (May high) and 112 (zero figure) beyond the last. While to the downside, the immediate support is seen at 110.28 (daily low) next at 110.36 (daily S1) and below that at 110 (key support).

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