- USD / JPY continues to gain positive traction for the fourth day in a row on Monday.
- The rebound in US bond yields benefits the USD and continues to support the pair’s upward momentum.
- The overbought RSI could prevent the bulls from opening new positions amid a softer tone around the stock markets.
The strong buy around the USD has been maintained endlessly during the European session on Monday and has pushed the USD / JPY pair to fresh nine-month highs, around the 106.65-70 region in the past hour.
The pair has extended its recent strong bullish momentum and has gained traction for the fourth day in a row on the first day of a new week. The rally has also marked the ninth day of positive movement of the previous ten and is due exclusively to a generalized strength of the US dollar.
The USD has risen to a three-and-a-half month high and has held supported by the optimistic US economic outlook, bolstered by the surprising NFP report on Friday. Apart of this, a new rise in US Treasury yields it has further inspired the USD bulls and provided additional momentum to the USD / JPY pair.
The United States Senate approved the highly anticipated $ 1.9 trillion pandemic aid package on Saturday and triggered another sell-off in the US bond market. This, coupled with expectations of a possible pick-up in US inflation, has brought the yield on the benchmark 10-year US bond back closer to 1.60%.
Meanwhile, the bond market crash has raised fears in other asset classes. In addition to this, the news of attacks on Saudi Arabian oil facilities has affected investor sentiment, although they have done little to benefit the safe-haven Japanese yen or hinder the positive movement of the USD / JPY pair.
There is no major economic data release in the United States on Monday. Also, the overbought on the RSI of the daily chart could prevent the bulls from opening new positions and limiting any further gains for the USD / JPY pair, at least for now.
USD / JPY technical levels
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