USD/JPY steadily climbs to session tops, further beyond mid-110.00s

Haresh Menghani FXStreet

• Risk-on mood/US-China trade optimism continues to weigh on JPY’s safe-haven status.
• The prevalent USD selling bias seemed to be the only factors capping any further upside.

The USD/JPY pair extended its steady intraday climb through the early European session and is currently placed at the top end of its daily trading range, around the 110.60 region.

Growing optimism over a possible resolution of the US-China trade disputes, especially after both sides reported progress in last week's trade talks, continued weighing on the Japanese Yen's safe-haven status and assisted the pair to build on Friday's late rebound from 110.25 level.

The uptick, however, lacked any strong follow-through and the pair remained capped below Friday's swing high amid the prevalent US Dollar selling bias in wake of the US President Donald Trump's declaration of a national emergency on border security on Friday.

Investors also seemed reluctant to place any aggressive bids ahead of this week's important release of the latest FOMC meeting minutes and absent relevant market moving economic releases on Monday on the back of the President’s Day holiday in the US.

Against the backdrop of a more dovish shift by the Fed, the FOMC meeting minutes will be looked upon for fresh clues over the central bank's rate hike path for the rest of 2019 and might turn out to be the next big trigger for the pair's next leg of a directional move.

Technical levels to watch

Any subsequent up-move might continue to confront some fresh supply near the 111.00 handle, above which the pair is likely to aim towards testing 100-day SMA resistance near the 111.70 region. On the flip side, the 110.35-25 region now becomes immediate support to defend, which if broken might turn the pair vulnerable to challenge the key 110.00 psychological mark.

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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