USD/JPY: Bulls in control, 5-DMA tested

The bulls appear to have faced exhaustion in the European morning, with the USD/JPY pair consolidating the strong rally witnessed over the last couple of hours.

USD/JPY extends above 101.50

The dollar-yen pair ran into 5-DMA resistance at 101.66 and turned lower from there, although manages to hold above the mid-point of 101 handle. The latest leg higher is mainly driven by strong gains seen on the US dollar index, which gauges the relative strength of the greenback. The USD index advances +0.21% to 95.70 levels.

The major also received fresh impetus from positive trading seen on the European indices futures, while latest headlines crossing the wires from BOJ and Japanese government officials contribute to the renewed selling in the yen.

Markets now await the BOE policy decision for fresh take on the risk trends, while the US jobs and factory data due later today will be also closely eyed.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 102 (round figure). A break above the last, the major could test 102.50 (daily R3). While to the downside, the immediate support is seen at 101.18 (daily pivot) and below that at 100.89 (daily low).