- USD/JPY attracted some dip-buying on Monday and turned positive for the fourth straight day.
- The risk-on mood continued weighing on the safe-haven JPY and extended support to the pair.
- A modest pickup in the USD demand provided an additional boost and remained supportive.
The USD/JPY pair shot to the highest level since July 5 during the first half of the European session, with bulls now eyeing a sustained move beyond the 111.00 mark.
Following an early dip to the 110.55-50 region, the USD/JPY pair caught some fresh bids on the first day of a new trading week and built on last week's solid rebound from the 109.10 support area. This marked the fourth successive day of a positive move and was sponsored by a combination of factors.
The prevalent risk-on mood – as depicted by an extension of a rally in the equity markets – undermined the safe-haven Japanese yen. This, along with a goodish pickup in the US dollar demand, provided and an additional boost to the USD/JPY pair and remained supportive of the ongoing bullish trajectory.
The USD remained well supported by prospects for an early interest rate hike by the Fed. It is worth recalling that the so-called dot plot indicated policymakers' inclination to raise interest rates in 2022. This, to a larger extent, helped offset a modest pullback in the US Treasury bond yields.
Apart from this, the positive momentum could further be attributed to some follow-through technical buying after last week's sustained break through the 110.25-30 supply zone. A subsequent move beyond the previous monthly highs and the 111.00 mark now seems to have set the stage for further gains.
Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data. This, along with scheduled speeches by a slew of influential FOMC members, might influence the USD price dynamics and produce some trading opportunities around the USD/JPY pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.