- Yen remains weak as stocks rise.
- Dollar supported by economic data and rise in yields.
The USD / JPY extended the bullish rally and set new weekly highs at 104.75. Since the start of the week, it has accumulated an advance of almost 100 pips. The rises continue to be supported by equity markets which continue to have strong upward momentum, weakening safe haven currencies.
On Wall Street, the Dow Jones is rising more than 1%, driven by advances in the presidential transition in the US This adds to the news about vaccines for the coronavirus. Those two factors are being key.
Besides the last US economic data was encouraging highlighting the PMI Markit report on Monday that showed an unexpected acceleration in activity.
The good tone of the markets weakened the yen, and at the same time, it has not played so against the dollar (as a result of the good US data and the rise in Treasury yields).
From a technical point of view, in a broad perspective the USD / JPY continues with a downtrend, although far from the lows and now back above the 20-day moving average, which is passing through 104.45. If it surpasses 105.60, then the pair would break a bearish line, favoring more rises or a consolidation at higher levels.
In the very short term, USD / JPY resistances are seen at 104.75, followed by 105.05 and 105.45. While the supports can be located at 104.50, 104.15 and 103.90.
Technical levels
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