USD/JPY gains further beyond 113.00 handle, hits fresh one-week tops

Haresh Menghani FXStreet

• Bullish momentum remains unaffected by subdued USD demand.
• Risk-off mood/falling US bond yields doing little to stall the up-move.
• Investors now look forward to BOJ decision for fresh impetus.

The USD/JPY pair continued gaining some positive traction through the mid-European session and is now placed at fresh one-week tops, around the 113.15-20 region.

The pair has, so far, managed to hold in positive territory for the second straight session and the bullish momentum, beyond the 113.00 handle, remained untouched by subdued US Dollar demand, which failed to benefit from progress on a major US tax reform bill.

Even a mildly negative tone around the US Treasury bond yields and weaker trading sentiment around European equity markets, which tends to underpin the Japanese Yen's safe-haven demand, did little to stall the pair's upward trajectory.

It would now be interesting to see if bulls are able to maintain their dominant position or some profit-taking kicks in later during the day as investors start repositionig themselves for the upcoming BOJ monetary policy decision on Thursday.

In the meantime, today's release of existing home sales data from the US would be looked upon to grab some short-term trading opportunities during the early NA session.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair towards its next hurdle near the 113.50-55 region, above which the pair seems more likely to aim towards reclaiming the 114.00 handle.

On the flip side, 112.90-85 area now seems to protect the immediate downside, which if broken could accelerate the fall back towards 112.35 horizontal level en-route the 112.00 handle.

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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