USD/JPY turns positive above mid-110s as Wall Street opens higher

• Wall Street opens  higher on improved market sentiment.
• US Dollar Index stays in the bottom half of its daily range.

The USD/JPY gained traction in the last 30 minutes and broke above 110.50 to move into the positive territory for the day. As of writing, the pair was trading at 110.65, adding 0.16% on the day.

A higher risk appetite in the early NA session as reflected by the strong robust by the major equity indexes in the United States makes it difficult for traditional safe-havens like the JPY find demand. At the moment, the Dow Jones Industrial Average and the S&P 500 are up 0.8% and 0.55% respectively. Furthermore, the 10-year US T-bond yield, which generally shows a strong correlation with the USD/JPY pair, is up 1% at 2.86% currently.

In the meantime, amid a lack of fresh fundamental catalysts, rising bond yields help the USD retrace its losses against its rivals. After starting the day on a weak note, the US Dollar Index reversed its course and is looking to erase all of its earlier losses. The DXY is now down only 0.04% at 93.70.

The risk perception could remain as the primary driver of the pair’s price action in the remainder of the day with a virtually empty economic calendar.

Technical levels to consider

On the downside, the initial support for the pair aligns at 110.35 (20-DMA/daily low) ahead of 110 (psychological level/50-DMA) and 109.50 (200-DMA). Resistances could be seen at 110.80 (Jul. 6 high), 111.10 (Jul. 3 high) and 110.40 (May 21 high).