USD/JPY surges past 111.00 to 111.30 on global risk-on rally

With signs of stability across global equity markets, the yen seems to loose it safe-haven status and the USD/JPY pair has surged beyond 111.00 handle to currently trade at a 5-week high level of 111.30.

In recent trading sessions, the pair was struggling to sustain its strength above 110.00 handle but minor dips towards 109.20-15 were bought into. Friday's upward revision of the US GDP for the first-quarter of 2016 coupled with hawkish comments from the Fed Chairwoman Janet Yellen provided the required boost and assisted the pair to break-through its recent trading range.

On Monday, the pair shrugged-off slightly better-than-expected reading and extended its Friday's rally to conquer 111.00 handle amid thin liquidity conditions on the back of a holiday in the US markets in observance of Memorial day. Meanwhile, the pair would continue to be driven by the risk sentiment surrounding global equity markets and a slight deterioration might trigger renewed buying interest in the Japanese currency.

Technical levels to watch

From current levels, immediate resistance is pegged near 111.88 (April 28 high), beyond which the pair might extend its up-move beyond 112.00 round figure mark to test 100-day SMA resistance near 112.45-50 region. 

On the flip side, recent trading range resistance break-out near 110.60-55 now seems to act as immediate support. Any dip below this immediate support is likely to be bought into and hence, might be limited till 110.20 horizontal support.