Brocker.Org: USD/JPY jumps to fresh session tops amid risk-on environment


Having filled the weekly bearish gap, the USD/JPY pair continued gaining traction and has now reversed part of Friday’s disappointing US economic data-led slide.

Currently trading around 113.65-70 region, just a few pips away from session tops touched in the past hour, a positive opening in the European equity markets, which tends to dent the Japanese Yen’s safe-haven appeal, helped the pair to build on Asian session recovery move from 113.00 neighborhood touched in wake of renewed geopolitical tension around the Korean peninsula. 

Adding to this, a modest recovery in the US treasury bond yields further collaborated to the pair’s strong up-move move during early European session. Rising bond yields, however, did little to stall Friday’s disappointing US macro data-led US Dollar slide and hence, any further up-move seems more likely to be capped below the key 114.00 handle.

Meanwhile, market seems to have digested today’s upbeat Japanese PPI print, with broader market risk sentiment and the US bond yield dynamics acting as key driver for the pair’s recovery move on Monday. Later during the NA session, the US economic docket would now be looked upon to grab some short-term trading opportunities. 

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Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The bearish RSI divergence on the 4-hour chart and a bearish MACD crossover, coupled with the overbought condition of the daily RSI if followed by a breach of the rising trend line on the 4-hour chart would open doors for a deeper pull back to 113.00 (100-DMA + 10-DMA) and 112.50 levels. Dips below 112.50 are likely to be short lived as the 5-DMA and 10-DMA are still sloping upwards. On the higher side, only a daily close above 114.37 (previous day’s high) would revive the bullish view.”