USD/JPY bulls looking to extend the momentum beyond 50-day SMA

USD/JPY continued scaling higher through the mid-European session on Tuesday.
Encouraging data on coronavirus vaccine trials remained supportive of the uptick.
Sliding US bond yields, broad-based USD weakness might cap any further gains.

Haresh Menghani FXStreet

The offered tone surrounding the Japanese yen lifted the USD/JPY pair to fresh one-week tops, around the 107.75 region. Bulls might now be looking to extend the momentum further beyond the key 50-day SMA barrier.

The pair added to the overnight modest positive move and gained some follow-through traction for the second straight session on Tuesday. The uptick was being supported by receding demand for the safe-haven Japanese yen amid signs of progress in the search for a COVID-19 vaccine.

The US drugmaker Moderna said on Monday that clinical results suggested its vaccine has a high probability to protect from the deadly coronavirus disease. This comes on the back of the recent optimism over the easing of lockdown restrictions globally and prompted investors to dump traditional safe-haven currencies.

Despite the Fed Chair Jerome Powell's upbeat comments about the US economy, the US dollar struggled to attract any meaningful buying interest, instead retreated further from three-week tops set last Friday. This coupled with a modest pullback in the US Treasury bond yields might further contribute towards capping any meaningful positive move for the USD/JPY pair.

Moving ahead, market participants now look forward to the release of the US housing market data – Building Permits and Housing Starts. This will be followed by the Fed Chair Jerome Powell and the US Treasury Secretary Steven Mnuchin's congressional testimony, which might produce some meaningful trading opportunities during the early North American session.

Technical levels to watch

USD/JPY

Overview
Today last price	107.69
Today Daily Change	0.35
Today Daily Change %	0.33
Today daily open	107.34

Trends
Daily SMA20	107.07
Daily SMA50	107.74
Daily SMA100	108.47
Daily SMA200	108.29

Levels
Previous Daily High	107.5
Previous Daily Low	107.04
Previous Weekly High	107.77
Previous Weekly Low	106.5
Previous Monthly High	109.38
Previous Monthly Low	106.36
Daily Fibonacci 38.2%	107.33
Daily Fibonacci 61.8%	107.22
Daily Pivot Point S1	107.08
Daily Pivot Point S2	106.83
Daily Pivot Point S3	106.61
Daily Pivot Point R1	107.55
Daily Pivot Point R2	107.76
Daily Pivot Point R3	108.02

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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