USD/JPY bulls eyeing a move back above 111.00 handle

   “¢   USD recovery seemed unaffected by disappointing US macro releases.
   “¢   Bulls taking cues from the ongoing upsurge in the US bond yields.  
   “¢   Risk-on mood weighs on JPY’s safe-haven appeal and remains supportive.

The USD/JPY pair has managed to recover a major part of its early decline to 2-1/2 week lows and might now be looking to move back above the 111.00 handle, despite weaker US macro data.

Data released on Thursday showed durable goods orders recorded a growth of 1% in June as compared to 3% anticipated, while core orders also fell short of consensus estimates. Adding to the disappointment, the US goods trade balance jumped to a four-month high level of $68.3 billion in June and initial weekly jobless claims ticked higher to 217K during the week ended July 20.  

The data, however, did little to hinder a modest US Dollar recovery attempt from over two-week lows and remained supported by the ongoing upsurge in the US Treasury bond yields, which was seen as one of the key factors behind the pair’s goodish rebound of around 30-35 pips from an intraday low level of 110.59.

Meanwhile, the prevalent risk-on mood, triggered by a positive trade-related outcome from a keenly watched meeting between the US President Donald Trump and European Commission President Jean-Claude Juncker, was seen weighing on the Japanese Yen’s safe-haven appeal and remained supportive of the uptick.  

It would now be interesting to see if the pair is able to build on the recovery move or the bounce back is once again sold into ahead of mid-111.00s, which has been acting as a key hurdle since the beginning of this week.  

Technical levels to watch

Any subsequent up-move is likely to confront fresh supply near the 111.35-40 region, above which the pair is likely to aim towards reclaiming the 112.00 handle. On the flip side, the 110.65-60 area now seems to protect the immediate downside, which if broken might turn the pair vulnerable to slide further towards 110.25 intermediate support en-route the key 110.00 psychological mark.