USD/JPY soars to highest in almost seven weeks, approaches 110.00
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USD/JPY soars to highest in almost seven weeks, approaches 110.00

  • Yen tumbles across the board on higher yields, risk appetite.
  • Dollar posts mixed results, DXY flat hovering around 90.00.

The USD/JPY extended the move higher and climbed to 109.86, reaching the highest level since April 9. It is holding near the top, with the bullish momentum intact, looking at the 110.00 level.

The rally in USD/JPY took place amid higher equity prices in Wall Street and amid a decline in Treasuries. The 10-year yield rose to 1.62%, the highest level since Monday.

Economic data showed initial jobless claims dropped to 406K, a fresh pandemic low, while durable goods orders dropped unexpectedly although details of the report were positive. The second reading on Q1 GDP showed the economy expanded at a 6.4% annualized rate. The reports that US President Biden plans to raise federal spending significantly over the next years boosted market sentiment.

Looking to the upside while above 109.70

The move of USD/JPY  gained more strength from a technical perspective after breaking the 109.45/50 barrier and then 109.70. As long as it remains above 109.70 the bullish momentum will be intact. On the upside, the next resistance stands at 109.95 followed by 110.15.

The pair  is having so far the biggest daily gain since May 12 and is posting two consecutive gains for the first time in May. Only some readings of overbought conditions in short-term technical indicators suggest a pause. The pair shows it can climb further and the key level now seems to be the 110.00 area.

Technical levels


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