• Bulls taking cues from resurgent US bond yields, shrug off weaker USD.
• Fading safe-haven demand weighing on JPY and provides an additional boost.
• A strong follow-through buying needed to confirm additional near-term gains.
The USD/JPY pair caught some strong bids on Wednesday and was now seen building on its momentum further beyond the key 110.00 psychological mark.
After yesterday's good two-way moves, the pair resumed with its prior appreciating move and spiked to 2-week tops in the last hour. The momentum remained unaffected by a weaker tone surrounding the US Dollar, with bulls seemed to track a goodish pickup in the US Treasury bond yields.
Also collaborating to the strong up-move, back to the very important 200-day SMA, was the prevalent positive trading sentiment across equity markets, which tends to undermine the Japanese Yen's safe-haven appeal.
It, however, remains to be seen if bulls are able to maintain their dominant position and make it through a technically significant moving average, amid escalating global trade war tensions and empty US economic docket.
Technical levels to watch
A strong follow-through buying beyond the 110.15-20 region (200-DMA) is likely to accelerate the up-move towards 110.75 intermediate resistance before the pair eventually aims to reclaim the 111.00 handle.
On the flip side, 109.80-75 area now becomes an immediate support to defend, which if broken could drag the pair back towards mid-109.00s en-route the 109.20 horizontal support and the 109.00 round figure mark.
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