• Regains positive traction and seems unaffected by a follow-through USD selling.
• Positive US bond yields/fading safe-haven demand driving the pair higher.
• Today’s key focus would remain on the release of latest FOMC meeting minutes.
Having retested weekly lows support near the 110.30-25 region, the USD/JPY pair attracted some buying interest and refreshed session tops in the last hour.
Currently holding comfortably above mid-110.00s, the pair has now moved past previous session's swing high and seemed rather unaffected by the prevalent US Dollar selling bias.
Against the backdrop of a goodish pickup in the US Treasury bond yields, a strong opening across European bourses weighed on the Japanese Yen's safe-haven appeal and was seen as one of the key factors behind the pair's latest leg of a sharp spike to an intraday high level of 110.70.
It, however, remains to be seen if bulls are able to maintain their dominant position or the up-move once again fizzles out at higher levels amid prospects of a full-blown US-China trade war. Ahead of the July 6 deadline, when the US is set to impose fresh tariffs of up to $50 billion on Chinese products, investors are likely to remain on the edge and might contribute towards keeping a lid on any strong up-move for the major.
Meanwhile, today's release of the latest FOMC meeting minutes might influence market expectations over the Fed monetary policy tightening cycle and eventually provide some meaningful impetus to the major.
Ahead of the key event risk, the US economic docket, featuring the release of ADP report and ISM non-manufacturing PMI, might also be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Immediate resistance is pegged near the 110.85 level, above which the pair is likely to surpass the 111.00 handle and aim towards challenging May monthly highs resistance near the 111.40 region.
On the flip side, the 110.30-25 region might continue to protect the immediate downside, which is closely followed by the key 110.00 psychological mark and 55-day SMA support near the 109.85-80 zone.
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