- US dollar rises further during US session amid higher US yields.
- Yen unable to gain momentum despite lower equity prices in Wall Street.
The USD/JPY pair rose further during the US session and climbed to 111.63, the highest level since Monday. The greenback is rising after three days of losses, erasing most of its weekly losses.
Biggest gains in 20 days
The dovish FOMC minutes released yesterday did not weaken enough the US dollar. Today, on the back of a rebound in US yields and economic data, gained more than 50 pips. As of writing trades slightly below 111.60.
The pair accelerated to the upside after the release of US data the showed a larger-than-expected increase in PPI in March and initial jobless claims at the lowest since 1969. More recently the greenback gained momentum and hit fresh highs against some of its main rivals.
The yen has been unable to strengthen despite falling equity prices. The DOW JONES is losing 0.25% and the NASDAQ 0.25%. Higher US yields supper the upside in the pair. The 10-year rose from 2.47% back above 2.50%. The DXY is also up after losing ground during three consecutive days. It trades at 97.20., still down for the week but far from the low it reached on Wednesday at 96.86.
Technical outlook
The USD/JPY broke a short-term downtrend line at 111.10 and since then rose more than 50 pips. Today’s rally pushed technical indicators to extreme overbought reading in the daily chart but still, the momentum remains bullish with no signals of a correction yet.
The next resistance levels might be seen at 111.65, followed by 111.80. If the pair retreats, support levels might be seen at 111.50 and 111.20 (European session high / 20-hour moving average).
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