USD/JPY sits at session tops ahead of US durable goods orders
|The Japanese Yen remained heavily offered across the board, helping the USD/JPY pair to hold with strong gains at multi-day peaks near 111.65-70 band.
Strong gains in European equity markets, pointing to improving investors' appetite for riskier assets, was seen driving flows away from traditional safe-haven assets, including the Japanese Yen.
In addition to this, a modest pick-up in the greenback demand, with the key US Dollar Index gaining traction further beyond the 97.00 handle, provided an additional boost to the pair's bullish momentum through European session on Monday.
It, however, remains to be seen if the pair is able to build on the up-move and decisively break through the 100-day SMA important hurdle amid lack of any strong follow through up-move in the US Treasury bond yields ahead of durable goods orders data from the US, due in a short while from now.
• US: Expect a slight increase of 0.2% m/m in goods orders in May – Danske Bank
Technical levels to watch
Valeria Bednarik, Chief Analyst at FXStreet writes, "the daily chart shows that the price met selling interest on approaches to the 100 DMA, currently converging with the 50% retracement of the latest daily slide around 112.00, while technical indicators head nowhere, but remain within positive territory. Shorter term, the 4 hours chart presents a neutral-to-bearish stance, with the price stuck around a modestly bearish 200 SMA, and technical indicators heading marginally lower around their mid-lines. A critical support comes at 110.90, the 38.2% retracement of the mentioned rally, with a break below it favoring a bearish extension towards the 110.00 region."
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