USD/JPY on the verge of a test of 106 the figure
|- USD/JPY bulls firming in the 106 area ahead of a busy week of data.
- COVID sentiment underpinning an improved risk profile in markets.
Despite the bond market turbulence still rattling investors on Friday, USD/JPY rose 0.3% to 106.55 to six-month highs as yields continued to underpin the greenback.
For the open on Monday, the pair is firm in 106.45 consolidating in a tight range of between 106.45/58 while Asian shares open bid as some semblance of calm returns to bond markets.
Meanwhile, China's official manufacturing PMI missed forecasts this weekend, so markets will look forward to better news from a raft of US data due this week including the February Nonfarm Payrolls report.
''The payrolls data have been much weaker than the spending and survey data over the last two months, but the February report will probably show momentum starting to pick up again.
More improvement is likely as COVID restrictions are eased further. Full recovery will likely take a while; payrolls are down by 9.9mn since last February (pre-COVID),'' analysts at TD Securities explained.
Nevertheless, helping sentiment at the start of the week was news of the deliveries of the newly approved Johnson & Johnson COVID-19 vaccine that should start on Tuesday.
In the same vein, for the first time since early November, less than 50,000 patients are hospitalized with Covid-19. Also, there's been a decrease in new cases and deaths since the abysmal January surge.
USD/JPY technical analysis
The price is in a bullish daily environment and could be on the verge of making a fresh high.
However, the 4-hour conditions are processing a correction which may give way to a test of 106 the figure in a 38.2% Fibonacci retracement.
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