USD/JPY holds steady around mid-108.00s, closer to multi-month tops

Sustained USD buying remained supportive of the bid tone surrounding USD/JPY on Monday.
Rallying US bond yields, an upbeat US economic outlook continued underpinning the buck.
A softer risk tone extended some support to the safe-haven JPY and capped gains for the pair.

Haresh Menghani FXStreet

The USD/JPY pair held on to its modest gains through the early European session and was last seen hovering near the top end of its daily trading range, just below mid-108.00s.

A combination of factors assisted the pair to regain positive traction on the first day of a new trading week and inch back closer to the highest level since June 2020 touched on Friday. The upbeat US monthly jobs report for February reinforced the narrative of a strong sequential recovery and continued underpinning the US dollar.

Bullish traders further took cues from a fresh leg up in the US Treasury bond yields, buoyed by the passage of a massive US fiscal spending bill. The US Senate on Saturday voted 50-49 in favour of a much-awaited $1.9 trillion pandemic aid package proposed by US President Joe Biden and sparked another sell-off in the US fixed income market.

In fact, the yield on the benchmark 10-year US government bond inched back closer to 1.60%, or over one-year tops and further benefitted the greenback. That said, a softer tone around the equity markets extended some support to the safe-haven Japanese yen and turned out to be the only factor that kept a lid on any runaway rally for the USD/JPY pair.

Investors turned cautious on the back of reports of attacks on Saudi Arabian oil production facilities over the weekend. Apart from this, overbought RSI on the daily chart further held bullish traders from placing aggressive bets and might collaborate towards capping gains for the USD/JPY pair, at least for the time being.

In the absence of any major market-moving economic releases from the US, the US bond yields will continue to play a key role in influencing the USD price dynamics. This, along with the broader market risk sentiment, might provide some impetus to the USD/JPY pair and allow traders to grab some short-term opportunities.

Technical levels to watch

USD/JPY

Overview
Today last price	108.47
Today Daily Change	0.12
Today Daily Change %	0.11
Today daily open	108.35

Trends
Daily SMA20	105.91
Daily SMA50	104.72
Daily SMA100	104.5
Daily SMA200	105.45

Levels
Previous Daily High	108.64
Previous Daily Low	107.82
Previous Weekly High	108.64
Previous Weekly Low	106.37
Previous Monthly High	106.69
Previous Monthly Low	104.41
Daily Fibonacci 38.2%	108.33
Daily Fibonacci 61.8%	108.14
Daily Pivot Point S1	107.9
Daily Pivot Point S2	107.45
Daily Pivot Point S3	107.07
Daily Pivot Point R1	108.72
Daily Pivot Point R2	109.1
Daily Pivot Point R3	109.54

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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