“¢ Easing risk aversion dampening JPY’s safe haven demand.
“¢ A goodish pickup in the US bond yields remains supportive.
“¢ Traders now eye US economic docket for some fresh impetus.
The USD/JPY pair caught some aggressive bids in the last hour and was now seen extending the positive momentum further beyond the 113.00 handle.
The pair built on overnight goodish recovery move from three-week tops and a combination of supporting factors kept pushing it higher through the mid-European trading session on Wednesday.
Risk-aversion trade eased on Wednesday and was evident from the prevalent positive tone around the European equity markets, which was eventually seen dampening the Japanese Yen’s safe haven demand.
Bullish traders further took cues from a fresh leg of an upsurge in the US Treasury bond yields, which largely offset a modest US Dollar weakness and remained supportive of the pair’s strong bid tone.
The latest leg of a sudden pickup could also be attributed to some technical buying on a sustained move beyond 100-hour SMA and the 113.00 handle. Hence, it would be prudent to see if the up-move is backed by any genuine buying or is just a stop-run.
Market participants now look forward to the US economic docket, highlighting durable goods orders data, which coupled with the second-tier releases of initial weekly jobless claims and revised UoM Consumer Sentiment, might produce some meaningful trading opportunities.
Technical levels to watch
Any subsequent up-move is likely to confront some resistance near the 113.40 horizontal zone, above which the pair is likely to aim towards surpassing the 113.75-80 intermediate resistance and reclaim the 114.00 handle.
On the flip side, the 112.90-85 region now seems to protect the immediate downside, which if broken might prompt some fresh technical selling and accelerate the fall back towards overnight swing lows, around the 112.30 area.
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