USD/JPY gains further beyond 111.00 handle, hits 4-month tops
The USD/JPY pair built on its recent bullish momentum and jumped to over 4-month tops, around the 111.30-40 band, during the Asian session on Monday.
After Friday's good two-way moves, to finally end the day nearly unchanged, the pair caught some fresh bids at the start of a new trading week and was being supported by a strong follow-through US Dollar buying interest.
The already stronger greenback got an additional boost after the US Treasury Secretary Steven Mnuchin said the Trump administration would delay implementing tariffs on Chinese goods, and would “put the trade war on hold”.
Adding to this, easing trade tensions between the world's two-largest economies triggered a fresh wave of global risk-on trade on Monday and further weighed on the Japanese Yen's safe-haven appeal, offsetting better-than-expected trade balance data from Japan.
Today's strong up-move could also be attributed to some follow-through technical buying above the 111.00 handle and a long-term falling trend-line resistance (drawn from August 2015 high and December 2015 high) near the 111.15 region.
In absence of any major market moving economic releases, the pair now seems poised to extend its bullish trajectory and could possibly aim towards reclaiming the 112.00 handle.
Omkar Godbole, Analyst and Editor at FXStreet writes: “A weekly close above the trendline hurdle would signal a continuation of the rally from the March low of 104.63 and allow a sustained rise to 113.00.”
“An unexpected failure to defend the psychological support of 110.00 would signal a downside break of the rising channel and open doors to 108.65 (May 4 low),” he further added.