USD/JPY: bulls look to regain 107.50 amid better risk sentiment

Lifted by a risk-on rally in equities, as bulls head for 107.80.
Peace talks around the Korean peninsula and higher Treasury yields boost risk sentiment.

The USD/JPY pair broke its overnight consolidation phase at Tokyo open and jumped sharply beyond the 107 handle, mainly driven by the risk-on rally in the Japanese stock markets. The Japanese benchmark index, the Nikkei 225 rallied as high as 22,193.50 points before finishing slightly lower, still up +1.47 percent on the day.

The Asian equities tracked the positive performance on its Wall Street peers, as upbeat US corporate earnings lifted the sentiment, Moreover, ongoing peace talks between South and North Korea also calmed fears and curbed the safe-haven bids for the Yen.

Meanwhile, markets ignored upbeat Japanese trade figures, as rising Treasury yields amid a slew of better US fundamentals overshadowed and thus, aided the renewed upside in the spot.

Later today, there is nothing of note in terms of macro news from the US docket and hence, the sentiment on the global equities will continue to influence the pair. Also, in focus will remain the speeches by Fed’s Williams, Dudley and Quarles for fresh USD moves.

USD/JPY levels to watch

FXStreet’s Analyst, Omkar Godbole noted: “The moving averages: 50, 100 and 200 - are aligned for a bullish move. Meanwhile, the relative strength index (RSI) has built a nice base above 50.00 (in the bullish territory) on the dailies and the 5, 10 and 21-day MAs are biased bullish. Hence, the spot looks set to break above 107.80 and will likely extend gains to 109.00 in the short-run.”

“On the other hand, a break below 106.70 would mark a downside break of the expanding channel and signal the corrective rally has ended. In such a case, the spot could revisit 105.00,” Omkar adds.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.