- Higher US yields and Wall Street support USD/JPY upside.
- Pair trades near key last week highs, holding a bullish tone.
The USD/JPY pair rose further during the American session amid a positive environment for risk appetite. The pair printed a fresh daily high at 109.67 and remains near the top and close to the 109.70 resistance zone.
In Wall Street, the Dow Jones gains 0.62% and the Nasdaq gains 1%, on its way to record close levels. US yields are up again, adding more support to the upside in USD/JPY. The 10-year yields stand at 1.88%, after closing on Friday at 1.82%. The agreement between the US and China has been a critical driver in the market’s mood.
The yen is among the weakest currencies on Monday on the back of risk appetite. The US dollar, measured by the DXY is modestly lower. Data from the US came in slightly above expectations today. The key report was the Markit PMI that showed some positive signals.
Technical levels
The USD/JPY pair is about to test again the 109.70 resistance zone that capped the upside last week. A consolidation on top would likely clear the way to more gains and a test of 110.00.
Another failure here could trigger a bearish correction. The immediate support is seen at 109.50 and below at 109.20. A break under 109.20 should signal more losses ahead and would alleviate the bullish pressure.
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