- USD / JPY regained positive traction on Monday and recovered the losses of the previous session.
- The risky mood undermined the safe haven JPY and continued to support the bullish move.
- The rally in US bond yields benefited the dollar and provided an additional boost to the pair.
The pair USD/JPY it maintained its offered tone for the middle of the European session, and the bulls are still expecting a sustained move past the very important 200-day SMA. The pair was last seen hovering above the mid-105.00, rising around 0.20% for the day.
Following Friday’s pullback from the three-month highs around the 105.75 region, a combination of support factors helped the pair regain positive traction on the first day of a new week. The prevailing optimism in the market undermined the safe-haven Japanese yen, while the continuation of the recent rally in US Treasury yields benefited the US dollar.
Global risk sentiment remained well supported by hopes for a strong economic recovery amid progress in coronavirus vaccines and the likelihood of massive US fiscal spending. In fact, the US Senate passed a budget resolution to accelerate President Joe Biden’s proposed $ 1.9 trillion coronavirus relief plan to pass without Republican support.
Meanwhile, the flow of risk appetite, coupled with expectations of increased government borrowing to finance the stimulus, pushed the benchmark 10-year US bond yield to the highest level in nearly a year. This helped the USD reverse its post-NFP losses on Friday, which, in turn, inspired bullish traders and was seen as another factor that provided additional boost to the USD / JPY pair.
However, it remains to be seen if the bulls can capitalize on the move or if the USD / JPY continues its struggle to find acceptance above the 200-day SMA. In the absence of any major economic releases in the market, it will be prudent to wait for some subsequent purchases beyond Friday’s high, around the 105.75 region, before placing further bullish bets.
Technical levels
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