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   “¢   A modest USD retracement prompts some profit-taking at higher levels.
   “¢   Subdued US bond yields do little to provide any fresh bullish impetus.
   “¢   Risk-on mood weighs on JPY’s safe-haven demand and might limit downside.

The USD/JPY pair trimmed some of its early strong gains and has now retreated around 20-25  pips from 4-month highs touched earlier.  

The pair continued drawing support from elevated US Treasury bond yields and was further supported by a strong follow-through US Dollar upsurge, which got an additional boost from easing US-China trade tensions.

Meanwhile, the latest optimism over diminishing prospects of a full-blown trade war between the world’s two largest economies sparked a global risk-on rally and was further seen weighing on the Japanese Yen’s safe-haven appeal.  

The USD witnessed a modest retracement from its best level since late last year and seems to be the only factor prompting some profit-taking, especially after the pair’s recent upsurge of over 200-pips over the past one-week or so.  

Hence, it would prudent to wait for a strong follow-through weakness before confirming that the pair might have topped out in the near-term.  

Focus now shifts to speeches by a trio of Fedspeakers, starting with Atlanta Fed President Raphael Bostic and followed by Philadelphia Fed President Patrick Harker and Minneapolis Fed President Neel Kashkari.

Technical outlook

Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “The positive tone prevails short term, despite the upward Momentum eases amid low volumes, according to technical readings in the 4 hours chart, where the pair keeps developing far above bullish moving averages. The RSI indicator holds around overbought levels, limiting chances of a steeper decline ahead. The pair has now a strong resistance at 111.60, with gains beyond it exposing the 112.00 figure and favoring a continued advance for the upcoming sessions.”