USD/JPY corrects from 3-week tops, near 110 handle

The yen jumped back on the bids and recovered some ground against its American counterpart, sending USD/JPY back to 110 handle amid cautious tone in the markets.

USD/JPY fails once again near 110.30

The dollar-yen pair came under renewed selling pressure and retreated from fresh multi-week highs, as the Asian traders turned cautious and sought safety in the Japanese currency amid looming uncertainty over a June Fed rate hike, despite a slightly hawkish FOMC minutes.

Moreover, sharp declines in the commodities space also triggered risk-aversion across the financial markets in Asia and therefore, offered some respite to the JPY bulls. Further, the decline in the USD/JPY pair can be also attributed to a corrective slide after the major peaked to the highest levels in almost a month. At the time of writing, USD/JPY trades -0.20% lower at 110, bouncing-off a dip to session lows at 109.94.

Wednesday’s FOMC minutes showed "Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor markets continued to strengthen, and inflation making progress toward the committee's 2 percent objective, then it likely would be appropriate for the committee to increase the target range for the federal funds rate in June."

Meanwhile, the USD/JPY pair will continue to track the broader market sentiment driven that would be mainly by the oil prices and to some extent broad USD moves, ahead of the US datasets and Fed speeches due later in the NY session.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 110.27 (3-week high). A break above the last, the major could test 110.50 (round figure). While to the downside, the immediate support is seen at 109.83/76 (1h 20-SMA/ 50-DMA) and below that at 109.50/44 (psychological levels/ 1h 50-SMA).