“¢ The ongoing bullish move seemed unaffected by a follow-through USD weakness.
“¢ Positive US bond yields/risk-on mood weigh on JPY and supportive of the up-move.
The USD/JPY pair continued gaining positive traction for the fourth consecutive session and is currently placed just below two-week tops set earlier today.
The pair extended this week’s goodish rebound from the 109.40-35 support and added to its gains further beyond the very important 200-day SMA. The bullish momentum seemed largely unaffected by the ongoing US Dollar retracement, with bulls tracking a modest uptick in the US Treasury bond yields.
This coupled with a global wave of risk-on trade, triggered by news that 28 EU leaders reached an agreement on migration, was seen weighing heavily on the Japanese Yen’s safe-haven appeal and remained supportive of the pair’s strong bid tone.
It, however, remains to be seen if the pair is able to build on the up-move or bulls once again fails to make it through 110.75-80 heavy supply zone as traders now look forward to the US economic data for some fresh impetus.
Today’s US economic docket features the release of personal income spending data, the core PCE price index – the Fed’s preferred inflation gauge, which followed by Chicago PMI and Revised UoM Consumer Sentiment index might produce some meaningful trading opportunities on the last day of the week.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes, “the pair looks set to take out 110.68 and could rise to 111.40 (May high), although the sustainability of gains remains under question as the bond markets favor the bears.”
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