- USD / JPY gains some positive traction on Friday and breaks a four-day losing streak.
- Upbeat US macro data on Thursday and the rebound in US bond yields provide support for the USD.
- The lack of a solid follow-up on the pair’s buying warrants caution before opening new bullish positions.
The pair USD/JPY moves with a slight positive bias during the European session on Friday, remaining above the 108.80 region after recovering and lows at 108.60.
The pair has reversed an initial drop to lows of more than three weeks, around the 108.60 region and, for now, seems to have broken four consecutive days of losing streak. The rally has been supported by a combination of factors, although it has lacked a strong follow-up buy.
The US dollar has registered a modest rebound from multi-week lows after Thursday’s upbeat US macroeconomic data indicated that recovery is on track. A continuation rally in the USD has been a key factor helping the USD / JPY pair gain traction on Friday.
The dollar has also benefited from a solid rebound in US Treasury yields That said, expectations that the Fed will keep interest rates low for a longer period has prevented USD bulls from opening aggressive positions and limited gains for the USD / JPY pair.
This makes it prudent to wait for some solid continuation buying before confirming that the recent corrective pullback from near 111.00 at the one-year highs is over. This will lay the foundations for a further appreciation movement in the USD / JPY pair.
Market participants are now awaiting the release of US University of Michigan home starts, building permits and preliminary consumer sentiment index This, along with US bond yields, will influence the USD. and it could generate trading opportunities around the USD / JPY pair.
USD / JPY technical levels
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