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USD/JPY clips the 111.00 key barrier for early Monday

7/2/2018, 11:25:47 AMTrading Strategies
USD/JPY clips the 111.00 key barrier for early Monday

The USD/JPY pair has broken the 111.00 major level early on Monday as the US Dollar continues last week's moves against the Japanese Yen, and the USD/JPY is heading back into May's highs near 111.40.

Late Sunday saw a mixed showing for Japanese indicators, with the Tankan Outlooks and Indexes printing at 23:50 GMT ahead of the Monday GMT rollover. The Tankan Large Manufacturing Index for Q2 came in at 21 (forecast 22, prev. 24), but the Large Manufacturing Outlook improved to 21 from the forecast 20, in-line with the previous reading. The Tankan Large All-Industry Capex also improved,  printing at 13.6% (forecast 9.3%, previous 2.3%).

It's a limited week for the JPY, and market sentiment can be expected to continue driving the Yen through broader markets as traders' widely-favored safe haven continues to battle it out with the Greenback as traders waiver on risk appetite, fueled in no small part by the ongoing US-China trade spat, and broader markets are awaiting further developments from either country.

USD/JPY Levels to watch

As noted by FXStreet's own Valeria Bednarik, "technical readings in the daily chart favor another leg higher ahead, although the upward strength remains limited. Nevertheless, the pair managed to recover after struggling at the beginning of the week with its 200 DMA, while technical indicators maintain upward slopes above their midlines, the RSI actually at 2-week highs. Shorter term, and according to the 4 hours chart, the pair is at risk of correcting lower, as it holds above its 100 and 200 SMA, but technical indicators have retreated sharply from near overbought levels, any way holding well above their midlines."

Support levels: 110.45 110.15 109.90      

Resistance levels: 110.95 111.40 111.80