USD/JPY refreshes weekly tops, 111.00 mark back on sight

Haresh Menghani FXStreet

• Easing US-China trade tensions weigh on JPY’s safe-haven appeal.
• Persistent USD buying/resurgent US bond yields provide an additional boost.

The USD/JPY pair continued gaining positive traction for the second consecutive session on Thursday and refreshed weekly tops in the last hour.

A continuous improvement in investors' appetite for riskier assets - like equities, amid easing US-China trade tensions, was seen weighing on the Japanese Yen's safe-haven appeal and remained supportive of the strong bid tone surrounding the major.

This coupled with a follow-through US Dollar upsurge, further supported by buoyant US Treasury bond yields provided an additional boost to the pair's ongoing recovery from over one-week lows touched earlier this week.

The US bond yields were propped higher by remarks from the Fed Chair Jerome Powell, who said on Wednesday that the US central bank would stick to its path of gradual monetary policy tightening cycle.

Today's up-move could further be attributed to some fresh technical buying, especially after yesterday's decisive move back above the very important 200-day SMA barrier. It, however, remains to be seen if bulls are able to maintain their dominant position or the up-move once again fizzles out ahead of the 111.00 handle.

Moving ahead, today's second-tier US economic docket, featuring the release of Philly Fed manufacturing index and the usual weekly initial jobless claims data will now be looked upon for some fresh trading impetus later during the early North-American session.

Technical levels to watch

The 110.80-90 region might continue to act as an immediate resistance, above which the pair seems all set to extend the momentum further towards the 111.40 area (May monthly top). On the flip side, retracement back below mid-110.00s now seems to find immediate support near the 110.25-20 region (200-DMA), which if broken might turn the pair vulnerable to slip back below the key 110.00 psychological mark and retest 109.80-75 support area.

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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