USD/JPY – Eyes three-week high

Dollar-Yen pair has turned positive and is nearing a break above 102.27 (Aug 12 high); a move that would mean the pair is trading at highest level since Aug 9.

Eyes 50-DMA

The spot appears on track to test 50-DMA hurdle of 102.74 levels. Buying interest spiked on Friday after Yellen said the case for rate hike has strengthened. That was enough for overstretched bears to unwind their positions, leading to a spike in the pair to 102.00 levels.

A minor retreat in Asia to 101.83 levels was quickly undone even though the treasury yields are flat. The spot was last seen trading around 102.20. Whether the pair extends Friday’s gains partly depends on the US personal spending and income report due later today.

USD/JPY Technical Levels

A break above 50-DMA level of 102.74 would open doors for 103.00 (zero figure). Acceptance above the same on daily closing basis could bring in fresh bids and lead the pair higher to 104.50 (falling trend line hurdle on daily chart).

On the lower side, a major support is seen directly at 100.71 (50% Fibo of 2011 low – 2015 high), under which psychological level of 100.00 would come into play. If breached on daily closing basis fresh selling could take the bird lower to 98.787 (Brexit day low).