“¢ Risk-on mood weighs on JPY’s safe-haven demand and helps regain positive traction.
“¢ A goodish uptick in the US bond yields underpin USD and provide an additional boost.
“¢ Investors now seemed reluctant ahead of this week’s key data and the Fed decision.
The USD/JPY pair held on to its strong daily gains and now seems to have entered a bullish consolidation phase around the 110.00 handle.
With investors shrugging off the G7 debacle, wherein relations between the US and its key allies deteriorated further, a global wave of risk-on trade weighed on the Japanese Yen’s safe-haven appeal and helped the pair to quickly fill a weekly bearish gap and regain positive traction.
The up-move was further supported by a goodish pickup in the US Treasury bond yields, which coupled with a modest pickup in the US Dollar demand, provided an additional boost and remained supportive of the pair’s strong bid tone.
Bulls, however, took some breather near a psychologically important round figure mark and ahead of the very important 200-day SMA amid empty US economic docket.
Moreover, investors also seemed to refrain from placing any fresh aggressive bets and preferred to wait on the sideline ahead of this week’s key US data/events, including the latest FOMC monetary policy update on Wednesday.
Technical levels to watch
Any subsequent up-move is likely to confront resistance near the 110.15-20 region (200-DMA), above which the pair is likely to aim towards reclaiming the 111.00 handle with 110.70 area providing some intermediate resistance.
On the flip side, 109.55 level now seems to protect the immediate downside, which if broken could accelerate the fall back towards 109.20-15 support area en-route the 109.00 handle and the next major support near the 108.70 region.
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