USD/JPY trims a part of its intraday gains, up little around 109.65-70 region

  • A combination of factors assisted USD/JPY to gain some traction for the second straight session on Monday.
  • The risk-on mood undermined the safe-haven JPY and remained supportive amid a modest USD strength.
  • The lack of any strong follow-through buying warrants some caution before positioning for further gains.

The USD/JPY pair retreated around 15 pips from Asian session swing highs and was last seen trading with only modest intraday gains, around the 109.70-65 region.

Following the previous session's modest pullback from one-week tops, the pair caught some fresh bids on Monday and might now be looking to build on the recent bounce from 50-day SMA support. This marked the second consecutive day of a positive move and was sponsored by a combination of supporting factors.

The underlying bullish sentiment in the financial markets – as depicted by an extended rally in the global equity markets – continued undermining the safe-haven Japanese yen. Apart from this, a modest US dollar strength and signs of stability in the US Treasury bond yields remained supportive of the move up.

Expectations that the Fed might begin the discussion on tapering its asset purchases in the face of rising inflationary pressures. In fact, the pace of inflation in the US climbed to a 13-year high in May. This, in turn, forced investors to lighten their bearish USD bets ahead of the FOMC policy meeting this week.

The fundamental backdrop supports prospects for additional gains, though bulls lacked conviction and once again failed near the 109.80-85 region. This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move amid absent relevant market-moving macro releases.

Technical levels to watch


Today last price 109.7
Today Daily Change 0.04
Today Daily Change % 0.04
Today daily open 109.66
Daily SMA20 109.35
Daily SMA50 109.12
Daily SMA100 108.06
Daily SMA200 106.28
Previous Daily High 109.84
Previous Daily Low 109.32
Previous Weekly High 109.84
Previous Weekly Low 109.19
Previous Monthly High 110.2
Previous Monthly Low 108.34
Daily Fibonacci 38.2% 109.64
Daily Fibonacci 61.8% 109.52
Daily Pivot Point S1 109.37
Daily Pivot Point S2 109.09
Daily Pivot Point S3 108.85
Daily Pivot Point R1 109.9
Daily Pivot Point R2 110.13
Daily Pivot Point R3 110.42



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