USD/JPY: bulls losing sight of the 110 handle, but hold above key 109.60/80 level
- USD/JPY: 110.00 caps bullish attempts, but...
- USD/JPY: chances remain skewed to the upside.
USD/JPY been capped in the Tokyo open with offers in at the 109.99 highs where exporters hedging temper the bull's advance above the key 109.60/80 level. A period of consolidation is taking place after a risk-on session on Monday overnight that was spurred on by the nonfarm payrolls upbeat report on Friday, painting a more positive picture of the US economy than what was first thought.
- Funda-FX wrap: markets shrugged off trade war risks
"Supporting USD/JPY was the rise in the US 10yr treasury yield from 2.90% to 2.94%, while 2yr yields rose from 2.48% to 2.51%. Fed fund futures yields also rose, predicting a rate hike in June and another by year end,"
analysts at Westpac explained.
Risk events ahead
- Key US data coming up - Nomura
Looking ahead, the next catalysts for the pair will indeed stay with the BoJ and FOMC next week, and ears will be on the ground for developments in what is heating up to be a hot trade war between the US and its allies as well as China. A major event will also be with the N.Korean/US summit that is to take place on the 12th June.
USD/JPY levels
From a technical point of view, the market needs to hold above the 21-day ma at 109.73 where analysts at Commerzbank said rallies will find resistance at the 111.39 recent high but noted that the key resistance remains the 112.11 2015-2018 downtrend.
Valeria Bednarik, chief analyst at FXstreet argued, that according to the 4 hours chart, chances remain skewed to the upside, as technical indicators resumed their advances after a modest downward correction well above their midlines, while the price keeps advancing above a bullish 200 SMA.