USD/JPY: poised to extend gains, 112.00 key
|USD/JPY Current price: 111.34
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Hopes that US president Trump will unveil its tax reform have fueled risk-on, resulting in the USD/JPY topping at 111.50 this Wednesday, its highest in two weeks. Trading not far below, the American dollar got a boost against its Japanese rival as US treasury yields keep recovering ground, latest at 2.33% for the 10-year benchmark, against previous 2.27%. With little news ahead, the pair will likely trade according to US assets during the upcoming session, although market players may remain cautious ahead of BOJ's monetary policy meeting early Thursday. From a technical point of view, the pair maintains its bullish stance, given that in the 4 hours chart, technical indicators have resumed modestly their advances after correcting extreme overbought readings, whilst buyers surged on a test of the 200 SMA that anyway presents a bearish slope. This last, around 111.10 is the immediate support, followed by 110.60, the probable bearish target in the case of dollar's weakness. Above the mentioned daily high on the other hand, the pair has scope to extend its advance up to 112.00, the 38.2% retracement of the November/December rally, and the level to surpass to confirm a more constructive outlook in the mid-term.
Support levels: 111.10 110.60 110.30
Resistance levels: 111.50 112.00 112.45
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