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  • Improving market sentiment weighs on safe-havens in the NA session.
  • US Dollar Index shows signs of life as it turns positive above 94.70.

After spending the majority of the day in a relatively narrow range near the 110 handle, the USD/JPY pair gained traction in the last hour and advanced to a fresh daily top at 110.40. As of writing, the pair was trading at 110.35, adding 30 pips on the day.

The return of the risk appetite in the second half of the NA session forced the safe-haven JPY to lose demand and provided fuel to the pair’s rise. Major equity indexes in the United States, which started the day in a mixed tone, turned positive as the lack of fresh headlines that could escalate the fears over the trade dispute between the United States and China improved the market sentiment.

Meanwhile, reflecting the risk-on mood, the yield on the 10-year US T-bond rose all the way up to 2.93% and was last seen at 2.926%, where it was up 1.15% on the day.

Furthermore, the US Dollar Index gathered strength on the back of higher yields and turned positive near 94.75, helping the pair extend its upside.

Technical levels to consider

With this latest upsurge, the RSI indicator on the daily  chart  turned north above the 50 mark, suggesting that buyers are looking to take control of the price action. The pair could encounter the first technical resistance at 110.65 (Jun. 18 high) ahead of 111.40 (May 21 high) and 112 (psychological level). On the downside, supports could be seen at 109.75 (200-DMA/50-DMA), 109.20 (Jun. 8 low) and 108.70 (Jun. 1 low).