USD/JPY hits fresh session tops, around 112.70 level
• A pickup in the US bond yields/USD demand helps regain traction.
• Record highs in stocks continue to dampen JPY’s safe-haven appeal.
• US data eyed for trading impetus ahead of Friday’s NFP.
After yesterday's volatile swing, the USD/JPY pair gained some fresh traction on Tuesday and is currently placed at the top end of its daily trading range.
Currently trading around 112.65-70 band, the pair has now recovered part of previous session's retracement slide from over 2-week tops and was being supported by a renewed uptick in the US Treasury bond yields, which helped revive the US Dollar demand.
Meanwhile, the ongoing record-setting rally in the US equity markets continues to weigh on the Japanese Yen's safe-haven appeal and supported prospects for additional near-term bullish momentum for the pair.
Investors, however, seemed to await for a fresh catalyst before initiating any fresh bets. Hence, the focus would remain on Friday's keenly watched US monthly jobs data (NFP), which should help investors to determine the pair's next leg of directional move.
In the meantime, today's US economic docket, featuring the release of trade balance data and ISM non-manufacturing PMI would be looked upon for some short-term trading opportunities.
Omkar Godbole, Analyst and Editor at FXStreet writes: "Yesterday's decline from 113.09 to 112.38 has established a falling tops pattern. A bearish follow-through/failure to move above 113.00 today could mean the technical recovery from the low of 110.84 has ended. A daily close today above 113.09 today would amount to a bullish outside day/engulfing pattern. It would signal continuation of the rally from 110.84 levels and could yield 114.00 levels as discussed here. On the downside, at least two consecutive daily closes below the 5-day MA would open up downside towards the recent low of 110.84."