USD/JPY retakes 114.00 mark and beyond, back near 1-month tops
| • Renewed US-China trade optimism helps quickly reverse an early dip.
• Improving risk-appetite weighs on JPY and provides an additional boost.
The USD/JPY pair reversed an early dip to the 113.60-55 region and is now looking to build on its positive momentum further beyond the 114.00 handle.
The pair stalled overnight retracement slide from over one-month tops, with renewed US-China trade optimism denting the Japanese Yen's safe-haven status and helping the pair to regain positive traction.
China's premier Li, while speaking in Singapore, said that the world's second-largest economy is willing to improve free trade through discussions and find a way out of the trade war between the two economic superpowers.
The news boosted appetite for riskier assets, evident from a goodish rebound in Asian equity markets/positive opening across European bourses, which was seen as one of the key factors driving the pair higher.
Meanwhile, the US Dollar was seen consolidating previous session's strong upsurge to 1-1/2 year tops and failed to provide any additional boost, albeit did little to hinder the ongoing positive momentum.
In absence of any major market moving economic releases from the US, broader market risk sentiment might continue to act as a key determinant of the pair's momentum through Tuesday's trading session.
Technical levels to watch
A follow-through buying has the potential to extend the positive momentum towards Oct. monthly swing highs, around the 114.50-55 supply zone, before the pair aims to reclaim the key 115.00 psychological mark.
On the flip side, the 113.85-80 region now seems to protect the immediate downside, which if broken might turn the pair vulnerable to head back towards retesting the 113.55-50 support area.
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