USD/JPY: making further tracks towards 55-day ma at 112.00 key target

Ross J Burland FXStreet

Currently, USD/JPY is trading at 111.08, up 1.20% on the day, having posted a daily high at 111.20 and low at 109.60.

USD/JPY is extending the upside with a continuation of the risk-on momentum in markets in the US session today. 110.34 and then 110.58 gave way to the demand while US stocks took off. S&P 500 is up to make fresh highs for the month and highest levels since March 15th and same goes for the Dow. However, while the markets are enjoying a run of optimism after the French election's first round result, there are many risks ahead that could check the bulls at a drop of a hat, from geopolitical tensions and fundamental political and economic variables this week.

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USD/JPY levels

"We should see a rally towards the 111.35/59 area, made up of the November 28 low, February low and the current April high," explained analysts at Commerzbank. "The next higher 55-day ma at 112.00 also remains in focus. Only above 115.62 would we look for a challenge to the key resistance offered by the 16-month resistance line at 117.14. Where are we wrong? Below 108.13 will target 107.50 July 2016 high and possibly 106.85, the 61.8% retracement. We cannot rule this out but it is not our favoured scenario."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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