USD/JPY leaps higher in tandem with Nikkei, re-takes 106

The USD/JPY pair bounced-off a brief dip below 105 handle and rallied hard over the last hour, as the bulls fought back control and march back towards 106 levels.

USD/JPY reverts towards 4-month peaks

USD/JPY was offered support by a renewed risk-on wave that gripped the Asian markets, as Trump’s victory is now perceived in the interest of US economic growth. Hence, investors’ confidence is restored, with fund flows seen back into risky assets such as equities at the expense of the safe-haven yen.

Moreover, stalled correction in the greenback across the board also appears to lend support to the renewed uptick in the spot. The major is last seen exchanging hands at 105.58, modestly flat on the day, while the Nikkei 225 index gallops +6.50%.

Attention now turns towards the US economic news due later in the NA session, while developments surrounding Fed rate hike prospects will also take center stage now.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 105.95 (Nov 9 high). A break above the last, the major could test 106.50 (psychological levels) and 106.72 (Jul 24 high) beyond the last. While to the downside, the immediate support is seen at 104.98 (daily low) next at 104.30 (10 & 20-DMA) and below that at 103.78 (Nov 1 low).

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