USD/JPY climbs to session tops, inching back closer to 106.00 mark

USD/JPY regained some positive traction on Monday amid receding safe-haven demand.
Upbeat Chinese PMI prints remained supportive of the prevalent risk-on environment.
Fed’s dovish signal last week might hold bulls from placing fresh bets and cap the upside.

Haresh Menghani FXStreet

The USD/JPY pair edged higher through the early European session and was last seen hovering near the top end of its daily trading range, around the 105.75 region.

The pair caught some fresh bids on the first day of a new trading week and recovered a part of the previous session's sharp intraday rejection slide of over 175 pips from the 107.00 neighbourhood. The move-up was supported by the prevalent risk-on mood, which tends to undermine the safe-haven Japanese yen.

The already stronger global risk sentiment got an additional boost on Monday following the release of better-than-expected Chinese Manufacturing and Services PMI prints. The Japanese yen was further pressured by expectations that Japan's next leader will continue the 'Abenomics' economic revival programme.

On the other hand, the US dollar was seen consolidating last week's heavy losses that came after the Fed Chair Jerome Powell's dovish signals at the Jackson Hole Symposium. A subdued USD demand might hold investors from placing any aggressive bullish bets and keep a lid on the USD/JPY pair's attempted recovery move.

During his keynote speech at the Jackson Hole Symposium, Powell on Thursday said that the Fed is willing to allow inflation to overshoot the 2.0% target to support the labor market and broader economy. This coupled with a weaker tone surrounding the US Treasury bond yields kept the USD bulls on the defensive.

There isn't any major market-moving economic data due for release from the US on Monday. This makes it prudent to wait for some strong follow-through buying before positioning for any further intraday gains. Conversely, sustained weakness back below the 105.40 horizontal zone will be seen as a fresh trigger for bearish traders and turn the USD/JPY pair vulnerable to challenge the key 105.00 psychological mark.

Technical levels to watch

USD/JPY

Overview
Today last price	105.8
Today Daily Change	0.43
Today Daily Change %	0.41
Today daily open	105.37

Trends
Daily SMA20	106.05
Daily SMA50	106.52
Daily SMA100	106.99
Daily SMA200	107.99

Levels
Previous Daily High	106.95
Previous Daily Low	105.2
Previous Weekly High	106.95
Previous Weekly Low	105.2
Previous Monthly High	108.16
Previous Monthly Low	104.19
Daily Fibonacci 38.2%	105.87
Daily Fibonacci 61.8%	106.28
Daily Pivot Point S1	104.73
Daily Pivot Point S2	104.1
Daily Pivot Point S3	102.99
Daily Pivot Point R1	106.48
Daily Pivot Point R2	107.58
Daily Pivot Point R3	108.22

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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