• A combination of supporting factors pushed USD/JPY higher for the third successive day.
  • The risk-on impulse undermined the safe-haven JPY and remained supportive of the move.
  • Rising US bond yields further impressed bulls, though subdued USD demand might cap gains.

The USD/JPY pair attracted fresh buying in the vicinity of the 135.00 psychological mark on Tuesday and turned positive for the third successive day. The momentum pushed spot prices to a three-day high during the early part of the European session, with bulls now looking to reclaim the 136.00 round figure.

A generally positive tone around the equity markets undermined the Japanese yen and turned out to be a key factor that acted as a tailwind for the USD/JPY pair. The risk-on impulse pushed the US Treasury bond yields higher, which resulted in the widening of the gap between the US-Japanese bond yields. This, along with a big divergence in the monetary policy stance adopted by the Fed (hawkish) and the Bank of Japan (dovish), continued lending support to the major.

On the other hand, the US dollar languished near a one-week low touched on Monday amid reduced bets for aggressive Fed rate hike moves. The recent slump in commodity prices raised hopes that inflation might be nearing its peak and forced investors to reassess expectations that Fed would tighten its monetary policy at a faster pace. This continued weighing on the USD, which might hold back bulls from placing aggressive bets around the USD/JPY pair and cap gains, at least for now.

Nevertheless, the fundamental backdrop seems tilted in favour of bullish traders and supports prospects for the resumption of the recent strong upward trajectory witnessed since early March. Sustained strength back above the 136.00 mark will reaffirm the constructive outlook and allow the USD/JPY pair to aim back to test a 24-year high, around the 136.70 region touched last week. Market participants now look forward to the US macro data for a fresh trading impetus.

Tuesday's US economic docket features the release of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index later during the early North American session. This, along with the US bond yields, will influence the USD and provide some impetus to the USD/JPY pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities ahead of Fed Chair Jerome Powell's appearance on Wednesday.

Technical levels to watch

USD/JPY

Overview
Today last price 135.96
Today Daily Change 0.51
Today Daily Change % 0.38
Today daily open 135.45
 
Trends
Daily SMA20 133.58
Daily SMA50 130.69
Daily SMA100 124.91
Daily SMA200 119.34
 
Levels
Previous Daily High 135.55
Previous Daily Low 134.52
Previous Weekly High 136.72
Previous Weekly Low 134.26
Previous Monthly High 131.35
Previous Monthly Low 126.36
Daily Fibonacci 38.2% 135.16
Daily Fibonacci 61.8% 134.92
Daily Pivot Point S1 134.8
Daily Pivot Point S2 134.15
Daily Pivot Point S3 133.77
Daily Pivot Point R1 135.83
Daily Pivot Point R2 136.2
Daily Pivot Point R3 136.86

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD pulls away from session highs, stays above 1.0200

EUR/USD pulls away from session highs, stays above 1.0200

EUR/USD has lost its bullish momentum during the American trading hours and started to edge lower toward 1.0200. With Wall Street's main indexes pushing lower after the opening bell, the greenback staged a rebound, causing the pair to turn south.

EUR/USD News

GBP/USD declines below 1.2100 following earlier rebound

GBP/USD declines below 1.2100 following earlier rebound

GBP/USD continues to erase the daily gains it recorded during the European session and trades below 1.2100. The negative shift witnessed in risk sentiment seems to be providing a boost to the safe-haven dollar, weighing on the pair.

GBP/USD News

Gold bulls to challenge $1,800 ahead of US inflation figures

Gold bulls to challenge $1,800 ahead of US inflation figures

Gold kept rallying on Tuesday, hitting a fresh one-month high. The greenback remained weak throughout the first half of the day, recovering some ground after Wall Street’s opening amid the poor tone of US indexes.

Gold News

Iran adopts crypto in foreign trade, debuts with $10 million import order

Iran adopts crypto in foreign trade, debuts with $10 million import order

In a watershed moment for crypto adoption, Iran registered its first official order for importing $10M worth of goods paid for in cryptocurrencies. A private Iranian news agency reported that the Ministry of Industry, Mine and Trade has plans to widely use cryptos in foreign trade.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures