- USD / JPY continues to gain ground for the fifth day in a row on Tuesday.
- The optimistic US economic outlook and rising US bond yields prop up the USD.
- A positive risk tone affects the safe haven Japanese yen and supports the pair’s upward move.
The pair USD / JPY has spiked above the key psychological level of 110.00 and has reached new one-year highs at the start of the European session on Tuesday.
A combination of factors has helped the pair extend its recent strong bullish momentum already move higher for the fifth day in a row on Tuesday. A positive sentiment in the stock markets it has weighed on demand for the Japanese yen as a safe haven. This, together with the sustained purchase of the US dollar and the rising US bond yields, has provided an additional boost to the USD / JPY pair.
Investors have remained optimistic about the Prospects for a Relatively Quicker US Economic Recovery from the pandemic, which has continued to prop up the dollar. Expectations have been bolstered by US President Joe Biden’s ambitious promise to administer 200 million vaccine injections in his first 100 days in office and hopes for an additional $ 3 trillion infrastructure spending plan.
Meanwhile, the reflation trade has pushed the 10-year US government bond yield above 1.70%, near the highs of more than a year touched earlier this month. This has been seen as another factor that has benefited the dollar and has pushed the USD / JPY pair above the 110.00 level for the first time since March 2020, setting the stage for additional short-term gains.
Having said that, RSI on daily chart shows overbought conditions and warrants some caution before positioning for any further bullish movement. Investors may also refrain from opening new bullish positions and may prefer to wait on the sidelines as the focus now shifts to Friday’s release of monthly US employment details.
Meanwhile, Tuesday’s release of the Conference Board’s Consumer Confidence Index, along with US bond yields, could influence USD price dynamics. This, coupled with broader market risk sentiment, could build new momentum and create some short-term trading opportunities.
USD / JPY technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
