USD/JPY: making fresh session highs on risk-on NY trade

• USD/JPY: is making fresh highs as stocks perform well on the day.  
• USD/JPY: according to the 4 hours chart, chances remain skewed to the upside.

USD/JPY is currently trading at 109.82, having posted a session high of 109.83 from a low of 109.37. The pair is through the 21-D SMA and resumes the daily correction within the weekly channel, eyeing the 200-D SMA at 110.18.

Receding volatility was supporting risk appetite on Monday with the S&P 500 up 0.4%, the DAX  up 0.4%, CAC 40 up 0.2% and FTSE 100 up 0.5%. The dollar was also on the front foot following the strong labour market report from Friday underscoring bets for a June hike from the Fed and sending US treasury yields higher, (the yield on the 10-year note up 3bps to 2.935%). However, the bulls are not out of the woods yet while there are plenty of key risk events and potentially problematic geopolitical matters that are very much unsolved.  

“This weekend there is the G7 summit in Quebec. Ahead of this, markets will be looking to see multilateral co-operation on economic issues, in light of recent anxieties about trade. Markets will also be looking for clarity on Italy’s future communication with Brussels over fiscal initiatives,”  

– analysts at ANZ argued.  

USD/JPY levels

The pair leans bullish while above the 55- & 100-DMA crossover and now taking on the Kijun  at 109.75 once again.  On the wide, the 112.30’s, (Fibos at 112.22/33) remain key upside target.  111.50 as an  option barrier that stood strong previously, lying just above the 111.39 May high.  

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, and according to the 4 hours chart, chances remain skewed to the upside:

“Technical indicators resumed their advances after a modest downward correction well above their midlines, while the price keeps advancing above a bullish 200 SMA, but so far contained by a directionless 100 SMA, a few pips above the 50% retracement of the mentioned decline at 109.75, the level to clear to confirm another leg higher for the upcoming sessions.”