USD/JPY holds steady near one-year tops, above mid-110.00s ahead of US data

USD/JPY gained traction for the fifth consecutive session on Wednesday.
A modest USD pullback, the prevalent cautious mood capped the upside.
The US macro data, Biden’s speech eyed for some trading opportunities.

Haresh Menghani FXStreet

The USD/JPY pair held on to its modest intraday gains through the mid-European session and was last seen trading around the 110.65 region, below the one-year tops set earlier this Wednesday.

The pair prolonged its recent strong upward trajectory and gained some follow-through traction for the fifth consecutive session. The momentum pushed the USD/JPY pair to the 111.00 neighbourhood, or the highest level since March 2020, though a combination of factors kept a lid on any further gains.

The prevalent cautious mood around the equity markets extended some support to the safe-haven Japanese yen. This, along with a modest US dollar pullback from four-month tops, held bullish traders from placing fresh bets and capped the upside for the USD/JPY pair, at least for the time being.

The yield on the benchmark 10-year US government bond struggled to capitalize on the overnight spike to levels beyond the 1.75% threshold, or 14-month tops. This, in turn, seemed to be the only factor that prompted some profit-taking around the greenback amid slightly overbought conditions.

That said, the prospects for a relatively faster US economic recovery from the pandemic helped limit the USD losses. Investors remained optimistic about the outlook for the US economy amid the impressive pace of coronavirus vaccinations and US President Joe Biden's spending plan.

Market participants now look forward to the US economic docket, highlighting the releases of ADP report on private-sector employment, Chicago PMI and Pending Home Sales. This will be followed by Biden's speech at 20:20GMT, which might provide a fresh impetus to the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price	110.72
Today Daily Change	0.36
Today Daily Change %	0.33
Today daily open	110.36

Trends
Daily SMA20	108.82
Daily SMA50	106.57
Daily SMA100	105.24
Daily SMA200	105.56

Levels
Previous Daily High	110.43
Previous Daily Low	109.74
Previous Weekly High	109.85
Previous Weekly Low	108.4
Previous Monthly High	106.69
Previous Monthly Low	104.41
Daily Fibonacci 38.2%	110.17
Daily Fibonacci 61.8%	110
Daily Pivot Point S1	109.92
Daily Pivot Point S2	109.49
Daily Pivot Point S3	109.24
Daily Pivot Point R1	110.61
Daily Pivot Point R2	110.86
Daily Pivot Point R3	111.29

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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