“¢ The USD sticks to daily recovery gains and remain supportive.
“¢ JPY further weighed down by positive tone around equities.
“¢ Technical buying above 111.00 handle accelerates the up-move.
The USD/JPY pair finally broke out of its daily consolidative trading range and surged through the 111.00 handle to over one-week high.
The US Dollar managed to hold on to its daily gains and was being supported by firming prospects for a September Fed rate hike. This coupled with fresh concerns over the US-China trade policies was seen lending some early support to the pair for the third consecutive session.
Adding to this, a mildly positive trading sentiment around the US equity markets weighed on the Japanese Yen’s safe-haven appeal and provided an additional boost since the early North-American session.
Meanwhile, possibilities of some short-term trading stops being taken out on a decisive move beyond Asian session high level of 110.93 could also be one the catalyst behind the latest leg of a sudden upsurge of around 25-30 pips.
With today’s strong up-move, the pair has now rallied over 150-pips from sub-110.00 level, near two-month lows set on Tuesday, and might now aim towards testing last week’s swing high, around the 111.45-50 region.
Technical levels to watch
Momentum beyond the mentioned resistance could get extended towards 110.80-85 supply zone before the pair eventually aims towards reclaiming the 112.00 handle. On the flip side, the 111.00-110.95 region now becomes an immediate support to defend, which if broken might turn the pair vulnerable to slide back towards challenging the key 110.00 psychological mark.
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