USD/JPY defends key ascending trendline on Recruit M&A
Having defended the key ascending trendline (drawn from March 26 low and April 18 low) in early Asia, the USD/JPY rose to a session high of 109.64, possibly due to M&A flows.
Japanese human-resources and consumer-information provider Recruit Holdings Co. has bought the California-based job hunting website Glassdoor for $1.2 billion. The cash deal could have put a bid under the US dollar.
Further, the greenback may have found love on speculation that rising oil prices and the resulting pickup in inflation could force the Fed to hike rates at a faster pace.
The data docket is light, hence during the day ahead, the pair will be at the mercy of the action in the oil markets and the equity markets. A continued rally in oil prices will likely help USD bulls to build on the M&A driven gains (seen in Asia).
USD/JPY Technical Levels
As of writing, the pair is trading at 109.48. Resistance is lined up at 110.04 (61.8 percent Fibonacci retracement of Jan-Mar drop), 110.17 (200-day moving average). A close above that level would signal resumption of the rally from the recent low of 104.63.
On the downside, support is seen at 109.08 (ascending trendline support) and 108.60 (100-day MA).