USD/JPY: Bulls in command, daily R1 tested
|Resurgence of USD buying amid rallying US treasury yields triggered a renewed uptick in the USD/JPY pair over the last hours, sending the rate to fresh four-day highs beyond 114 handle.
USD/JPY awaits FOMC
The dollar-yen pair receives fresh impetus from persistent risk-on moods across the financial markets, with the safe-haven yen dumped amid strong gains on the Japanese stocks and higher treasury yields. The overall market sentiment got a further boost after the Chinese CPI figures came out upbeat and added to yesterday’s solid trade data, thus, fading concerns over China slowdown.
Moreover, ongoing strength in the US dollar across the board in wake of ECB’s dovish stance further collaborated to the upside in the major. The spot is last seen changing hands at 114.42, easing slightly after the bulls hit a high at daily R1 of 114.57.
Data-wise, we have a fairly light European calendar, and hence focus shifts towards the US consumer sentiment data due out in the American session. While the main risk event for the major this month remains next week’s FOMC interest rate decision.
USD/JPY Technical levels to watch
The major finds immediate resistance at 114.57 (daily high/ R1). A break above the last, the major could test 114.83 (10-month high) and 115 (round figure) beyond the last. While to the downside, the immediate support is seen at 114.03 (5-DMA) next at 113.82 (10-DMA) and below that at 113.29 (daily S1).
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