USD/JPY drops to test 5-DMA, despite rallying Nikkei

The USD/JPY pair is seen consolidating the downside in the late-Asian trades, having met fresh offers earlier on the day, despite better risk conditions persisting in the markets.

USD/JPY revisits daily lows near 5-DMA at 102.29

The dollar-yen pair remained under pressure almost through the Asian trades so far this Wednesday, as the rate corrected lower after a profit-taking rally seen yesterday. While a risk-on rally in the Asian equities, especially the Japanese indices, also failed to provide support to the pair.

Moreover, a minor retreat in the US dollar across the board after the recent US data-backed strength, also added to the weakness in the major. At the time of writing, USD/JPY drops -0.42% to 102.34, hovering within a striking distance of session lows struck earlier at 102.27.

Next of relevance for the major remains the EU Summit, which will drive the market sentiment, ahead of the US economic releases due later in the NA session.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 102.47/50 (Jun 27 high/ psychological levels). A break above the last, the major could test 103.19 (post-Brexit high). While to the downside, the immediate support is seen at 101.88 (daily S1) and below that at 101 (round figure).