A good market mood is lifting USD / JPY, which is now trading at daily highs in the price area of 106.40. The pair is bullish in the short term with support at 106.30, as noted by FXStreet chief analyst Valeria Bednarik.
“Support comes from yields on US Treasuries, ahead of the US opening, reflecting market optimism. Stocks, on the other hand, are not doing as well after Monday’s excellent performance. European indices are barely higher, while US indices hold yesterday’s gains. In general, the greenback is weaker against most of the major rivals, with the exception of those considered safe havens. “
USD / JPY is now above the 61.8% retracement of its last daily decline, measured between 107.04 and 105.09, at 106.29. In the 4-hour chart, the pair rallied above all of its moving averages, which lack clear directional strength anyway. Technical indicators, meanwhile, have advanced to positive levels, partially losing their bullish strength but still heading north. “
“Further gains are expected on a breakout above 106.70, immediate resistance, to new monthly highs above 107.05.”