USD/JPY: bulls looking for a break to 109.32?

USD/JPY: bulls trigger the buy stops and the pair takes off.
USD/JPY: where next, 110 on the cards after 109.32 cleared?

Ross J Burland FXStreet

USD/JPY overcame 108.00 option barriers and triggered buy stops above on Monday in European trade. Currently, USD/JPY is trading at 108.66, up 0.93% on the day, having posted a daily high at 108.73 and low at 107.66.

Higher US yields, month-end approaching, (importers are piling in), and despite lower stock prices, there is a limit to the downside in the benchmarks, (falling risk aversion supportive as well), the yen is testing fresh lows at levels last seen in mid-February.

USD/JPY has been extending its range to the upside for several sessions and risk is now open to the 110 handle with the US 10-yrs looking in at a break on the 3% handle.

Other key news for USD/JPY traders

"Widening interest rate differentials remain a key headwind for JPY and the 10Y U.S.-Japan spread has extended to a fresh 10 year high above 290bpts. Comments from BoJ Gov. Kuroda have highlighted the need to maintain ‘strong’ accommodation, offsetting domestic political developments. PM Abe’s support has fallen to fresh lows, threatening the future of his Abenomics policy agenda," analysts at Scotiabank explained.

USD/JPY levels

Analysts at Commerzbank argue that the 50% retracement at 108.98 and the top of the cloud at 109.32 are levels that are next in the line of fire. "Dips lower will find initial support at the 106.83 55 day ma and the 105.66 current April low. Where are we wrong? Below the March low at 104.56 would introduce scope to 103.22, then 100.69 (Fibonacci retracements). This is not favoured," the analysts added.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP rebounds on rising on-chain activity

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.