“¢ Regains positive traction and seemed unaffected by a subdued USD demand.
“¢ A goodish pickup in the US bond yields offset cautious mood and remain supportive.
The USD/JPY pair caught some fresh bids at the start of a new trading week and is currently placed at session tops, around mid-112.00s.
The pair stalled its retracement slide from six-week tops set on Friday and regained positive traction, despite subdued US Dollar price action. Bulls seemed to track a goodish pickup in the US Treasury bond yields, amid firming prospects for a gradual Fed monetary policy tightening through 2018 and remained largely unaffected by the recent escalation of trade war fears.
Even the prevalent cautious mood around equity markets, which tends to underpin demand for the Japanese Yen’s safe-haven demand, did little to prompt any fresh selling and stall the pair’s positive momentum through the early European session.
It would now be interesting to see if the pair is able to build on the momentum and aim towards reclaiming the 113.00 handle as market participants now look forward to this week’s important US macro data/events from some fresh directional impetus.
A busy week kicks off with the release of US monthly retail sales data, which might assist traders to grab some short-term opportunities later during the early North-American session.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet explains, “the currency pair cleared the three-year-long (2015-2018) falling trendline last week and closed well above 112.00, confirming the sell-off from the June 2015 high of 125.86 has ended and the bulls are back in a commanding position.”
He further adds, “the odds are stacked in favor of a rally to/above the 200-week MA located at 113.24.”
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