USD/JPY testing higher in Tokyo, 109 here we come?

USD/JPY: burns through the 108 handle and keeps wanting to go higher.
USD/JPY: technical aligned bullish still, where next?

Ross J Burland FXStreet

USD/JPY has been poking at the 108.80 resistance in the Tokyo's opening hour as the Nikkei slips a few notches from 22265 to 22170. Currently, USD/JPY is trading at 108.76, up 0.05% on the day, having posted a daily high at 108.82 and low at 108.67.

It was all about the dollar overnight, and the US 10yr treasury yields that were extending their recent surge to just below the 3.00% mark making a high of 2.996% high as the highest since Jan 2014. The US dollar was higher against all of G10 currencies.

Dollar testing upside, moves through 90.3200-90.9850

The DXY traded between 90.3200-90.9850 and was ending the session +0.70% at 90.95 while traders figure that the Fed might wish to hike four times in 2018 with Bloomberg calculations showing that the Fed fund futures yields are pricing for the next rate hike in June at 97%.

With geopolitics risks put on ice, for the time being, the yen was subsequently one of the weakest to the dollar on Monday. USD/JPY climbed 108.75 after buys stops were triggered by a move through 108 the figure as the key breakout area.

USD/JPY levels

Jim Langlands of FX Charts explains that the daily momentum indicators retain a constructive bias and seem set to head higher still: "The weeklies are also turning higher and sentiment does appear to be accelerating so buying dips still seems to be the plan."

Valeria Bednarik, chief analyst at FXStreet, explained that the 4 hours chart shows that indicators accelerated north, maintaining their upward strength despite being in extreme overbought territory: "In the same chart, moving averages gain upward traction far below the current level, becoming irrelevant as short-term supports."

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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