USD/JPY rallies to two-week highs above 113.80 on broad-based USD strength

• US Dollar Index continues to push higher above 97.
• Wall Street pares early losses.
• Consumer confidence in the U.S. remains strong despite a modest drop in November.

The USD/JPY pair gained traction in the last hour and rose to its highest level in two weeks at 113.81 boosted by rising demand for the greenback. As of writing, the pair was trading at 113.70, adding 0.1% on a daily basis.

The US Dollar Index, which tracks the greenback against a basket of six major currencies, rose to 97.37 after the data published by the Conference Board showed that the consumer confidence in the U.S. stayed healthy despite the sell-off witnessed in equity markets. Although the headline Consumer Confidence Index fell to eased to 135.7 in November from 137.9 in October,  “Despite a small decline in November, Consumer Confidence remains at historically strong levels,” Lynn Franco, Senior Director of Economic Indicators at The Conference Board, noted to help the greenback gather strength. At the moment, the DXY is up 0.2% on the day at 97.25.

On the other hand, the upbeat data also improved the market sentiment ahead of the holiday season and allowed Wall Street to gain traction after starting the day in the red. With the Nasdaq Composite and the S&P 500 turning positive in the last minutes, the JPY struggled to find interest as a safe haven.

Later in the day, FOMC members Evans and George will be delivering speeches. Earlier today, Richard Clarida, the Federal Reserve’s Vice Chairman, said that he would support further rate hikes if inflation were to surprise to the upside.

Technical levels to consider

The initial resistance for the pair aligns at 113.80 (daily high) ahead of 114.20 (Nov. 12 high) and 115 (psychological level). On the downside, supports are located at 113.30 (20-DMA), 112.95 (50-DMA) and 112.25 (100-DMA).