USD/JPY rebounds in sync with DXY, back above 50-DMA

The US dollar ran through fresh bids over the last hour, rescuing the USD/JPY pair from three-day lows of 113.56. The US dollar regained poise against most its major peers, largely on the back of fresh selling seen in EUR/USD amid widening French/ German 10-year bond yield gap, as uncertainty around French elections resurfaced.

Moreover, a broad recovery seen in the European equities eased risk-off trades a bit, underpinning the sentiment around the buck at the expense of the safe-haven Yen. However, it remains to be seen for how long the major can sustain the recovery mode, as the treasury yields continue to trade in negative territory, despite heightened odds of a March Fed rate hike.

Amid a data-light US calendar ahead, the spot will continue to get influenced by the persisting risk sentiment and USD dynamics, as investors eagerly await the US factory orders data for fresh incentives.

USD/JPY Technical levels to watch

The major finds immediate resistance at 113.93/96 (5 & 100-DMA). A break above the last, the major could test 114.26 (Classic R2/ Fib R3) and 114.97/115 (Feb 15 high/ psychological levels) beyond the last. While to the downside, the immediate support is seen at 113.37/21 (20 & 10-DMA) next at 113.06/113 (Feb 16 low/ zero figure) and below that at 112.75/71 (Feb 20 & Mar 1 low).

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