USD/JPY jumps to fresh session tops, gains further beyond 106.00 handle

Haresh Menghani FXStreet

• Bulls seemed to track a goodish pickup in the US bond yields.
• Risk-off mood fails to hinder the latest leg of up-move.
• All eyes remain glued to the much awaited FOMC decision.

The USD/JPY pair reversed an early dip to session low level of 105.68 and has now jumped to fresh session tops, reversing a major part of Friday's downslide.

Despite a subdued US Dollar price action, the pair found some decent support near Friday's swing low and seemed to track a goodish pickup in the US Treasury bond yields. However, the prevalent risk-off mood, as depicted by heavy losses across European equity markets, underpinned the Japanese Yen's safe-haven appeal and was seen keeping a lid on any further up-move.

Moreover, investors might also be reluctant to place any aggressive bets and prefer to wait on the sidelines ahead of this week's FOMC decision, which might further collaborate towards capping gains, at least for the time being.

It would now be interesting to see if the pair is able to build on the momentum or the up-move once again gets sold into amid growing concerns over the US President Donald Trump's protectionist stance and the recent US political turmoil.

Technical levels to watch

Weakness back below the 106.00 handle might now turn the pair vulnerable to break below 105.65-60 support area and head towards testing its next support near the 105.25 region.

On the upside, 106.55-60 area might act as an immediate resistance, above which the pair seems all set to aim towards surpassing the 107.00 handle before eventually darting towards 107.25-30 supply zone.

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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