• On bids for the third consecutive session.
• A follow-through USD recovery supportive.
• Wednesday’s FOMC minutes hold the key.
The USD/JPY pair continued gaining some positive traction for the third consecutive session on Tuesday and jumped back to the 107.00 neighborhood.
The pair to build on its recent recovery move from over 15-month lows, set last Friday, and was being supported by a follow-through greenback buying interest. A goodish pickup in the US Treasury bond yields provided an additional boost to the US Dollar's recovery move from over 3-year lows and remained supportive of the pair's steady up-move.
The pair has now gained nearly 150-pips over the past three trading session and seems to have largely ignored the prevalent cautious sentiment around equity markets, which tends to underpin the Japanese Yen's safe-haven appeal.
With the USD price dynamics turning out to be an exclusive driver of the pair's momentum, Wednesday's FOMC meeting minutes will now play a key role in determining the pair's next leg of directional move.
Technical levels to watch
A convincing breakthrough the 107.00 handle, the pair is likely to accelerate the up-move towards 107.45-50 supply zone before eventually darting towards reclaiming the 108.00 round figure mark.
On the flip side, 106.70 level now seems to protect the immediate downside, which if broken could drag the pair back towards testing its next major support near the 106.15-10 region ahead of the 106.00 handle.
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