USD/JPY clinches fresh peaks around 110.40

  • The pair rebounds and tests daily highs at 110.40.
  • Dovish Draghi sent EUR/USD lower, lending support to USD.
  • US 10-year yields rebound from lows at 2.93%.

The greenback has now gathered sudden traction and pushed USD/JPY to the 110.40 region, or daily highs, just to lose some momentum afterwards.

USD/JPY higher on dovish ECB

The pair is alternating gains with losses today following Wednesday’s drop after the FOMC meeting weighed down on the buck.

Furthermore, yields of the key US 10-year note managed to bounce to fresh tops above the 3.0% handle in the wake of another rate hike by the Federal Reserve, although the upside momentum evaporated soon afterwards, dragging yields to today’s low near 2.93%.

Adding momentum to the greenback, the ECB left unchanged its rates at today’s meeting and announced the end of its QE programme in December 2018, although President Draghi said the Council did not discuss any changes in policy, disappointing EUR-bulls and triggering a sharp pullback in EUR/USD.

On another front, US Retail Sales expanded more than expected 0.8% MoM in May, Initial Claims rose by 218K WoW, also bettering estimates and Export/Import Prices also surprised to the upside, all collaborating with the strong rebound in USD.

USD/JPY levels to consider

As of writing the pair is gaining 0.01% at 110.34 and a break above 110.86 (high Jun.13) would open the door to 111.39 (high May 21) and finally 111.50 (high Jan.18). On the other hand, the immediate support aligns at 110.23 (200-day sma) seconded by 109.19 (low Jun.8) and then 108.91 (55-day sma).

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