USD/JPY trades calmly near 200-DMA, preserves daily gains above 112

The USD/JPY pair is trading near its daily high of 112.45 as the greenback is holding on to its daily recovery gains against its rivals. As of writing, the pair is at 112.40, up 0.2% on the day.

Although the US Dollar Index is headed for its lowest weekly close in nearly nine months, the USD/JPY pair is about to end the week more than 100 pips higher. The fact that the European currencies stole the spotlight throughout the week on heightened expectations of tightening moves by the BoE and the ECB, the JPY struggled to find any interest from market participants. The EUR/JPY is gaining nearly 400 pips on the week while the GBP/JPY is up 450 pips.

• US Dollar bid around 95.50… still (very) red for the week

On the other hand, major equity indexes in the U.S. are recording earnings on Friday with the Dow Jones Industrial Average up 0.4% and the S&P 500 adding 0.15%, making it difficult for the safe-haven JPY to recover its losses.

Technical outlook

The RSI on the daily graph is moving higher toward the 70 handle on Friday, suggesting that the pair could extend its gains before making a technical correction. 112.50 (200-DMA) could be seen as the initial resistance for the pair ahead of 112.90 (Jun. 29 high) and 113.75 (May. 16 high). To the downside, supports locate at 111.50 (50-DMA/100-DMA),(200-DMA), 111.00 (Jun. 21 low/20-DMA) and 110.00 (psychological level).

• USD/JPY now targets 113.15 near term – UOB