- A combination of factors helped the USD / JPY attract some buying near 109.70 on Monday.
- Risk appetite undermined the safe-haven JPY and acted as a tailwind for the pair.
- The recovery in US bond yields extended some support to the USD and provided a modest increase.
The pair USD/JPY It rallied around 25 pips from the three-day lows touched earlier this month and was last seen trading near the daily highs, just below the key psychological level of 110.00.
The pair halted the previous session’s retracement decline from the 110.25 region, or two-week highs, and attracted some buying on the dips near the 109.70 region on the first day of a new week. Risk appetite undermined demand for the traditional safe-haven Japanese yen and acted as a tailwind for the USD / JPY pair.
The bulls were also inspired by a modest rebound in US Treasury yields as investors took in comments from Fed Chairman Jerome Powell on Friday, benchmarking the yield on the US government bond. 10 years found a decent support close to 1.30%. This, in turn, extended some support to the US dollar and provided a modest rise to the USD / JPY pair.
Despite the supporting factors, the rally lacked strong buying tracking and thus warrants some caution for aggressive bull traders. This makes it prudent to wait for a sustained strength beyond 110.00 before positioning for a move back towards a two-week trading range resistance near the 110.20-25 region.
A convincing advance will lay the groundwork for further gains and push the USD / JPY pair past intermediate resistance near the 110.55-60 area and the 110.80-85 region. The momentum could extend and allow traders to aim to regain the round 111.00 level in the near term.
US bond yields could influence USD price dynamics and give USD / JPY some boost. Traders will follow the signals of the broader market risk sentiment to seize some short-term opportunities.
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.
