USD/JPY spikes to 112.00 handle post-Yellen/US GDP
| • US Q3 GDP revised higher to show 3.3% annualized growth.
• Risk-on mood weighing heavily on JPY’s safe-haven appeal.
• Surging US bond yields provides an additional boost.
The USD/JPY pair continued scaling higher through the early NA session and managed to move past the 112.00 handle post-US GDP revision.
The US Dollar got a minor boost after the US GDP was revised higher to show economic growth of 3.3% (annualized rate) during the third quarter of 2017, slightly better than 3.2% expected and also stronger than 3.0% reported in the original estimates.
The positive reading, along with a sharp upsurge in the US Treasury bond yields, following the outgoing Fed Chair Janet Yellen's testimony, provided an additional boost to the pair's goodish recovery move from Monday's 2-month lows.
Meanwhile, the prevalent risk-on mood, as depicted by strong gains across equity markets despite North Korea's latest ballistic missile test, was also seen weighing heavily on the Japanese Yen's safe-haven appeal and further collaborated to the pair's stronger up-move to one-week tops.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: "Technically, the pair presents a modest bullish stance, as in the 4 hours chart, technical indicators entered bullish territory and head higher, although with limited momentum, as the price remains far below its 100 and 200 SMAs with the shortest currently around 112.50. The pair needs to accelerate through the current level to be able to continue advancing, firstly towards 112.00 and later towards 112.45. A sudden reversal that takes the price below 111.20, on the other hand, would lean the scale towards the downside for the rest of the day."
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