USDJPY Continues Flying Through Bullish Channel
Usdjpy keeps its bullish momentum and follows a bullish channel. Having filled the post-Macron weekly bullish gap, the USD/JPY pair has managed to bounce off lows but remained capped below the 113.00 handle.
After an immediate reaction to the market-friendly outcome from the French Presidential election, the pair lacked any follow through buying interest and retreated back to 112.60 level. Markets had already price in pro-EU centrist Emmanuel Macron’s victory and hence, the initial gap was sold into.
The US Dollar, however, remained supported by growing prospects for an eventual June Fed rate-hike action, against the backdrop of Friday’s upbeat headline NFP numbers. The same is being further reaffirmed by a fresh wave of up-tick in the US treasury bond yields, which eventually helped the pair to bounce off lows to currently trade around 112.80-75 region.
• US: April jobs report indicates solid growth in employment – Nomura
It would now be interesting to see if the pair is able to build on the early up-move or continues with its struggle to conquer the 113.00 handle amid absent fundamental drivers, in terms of any major market moving economic releases from the US on Monday.
Technical levels to watch
On a sustained break through the 113.00 handle, the pair is likely to accelerate the up-move towards 113.35 horizontal resistance above which a bout of short-covering could lift it further towards 113.85 intermediate resistance ahead of the 114.00 handle.
On the flip side, immediate support is pegged near 112.50 area, which if broken seems to drag the pair towards 112.10-112.00 support en-route 111.80 horizontal support.
