USD/JPY: Bulls trying hard to regain 111 handle

The corrective move lower in the US dollar appears to have lost steam last hour, prompting the USD/JPY pair to attempt another run towards 111 handle.

USD/JPY eyes on Treasury yields

The spot remains better bid as we head into early Europe, with the USD bulls regaining poise, as the US dollar is set to resume upbeat US NFP-led rally against its major peers. The USD index stalled its retreat at 93.20 to now trade around 93.31 levels, almost unchanged on the day.

Later today, further bullish momentum in the USD/JPY pair will gain traction in tandem with Treasury yields, especially the shorter-duration US yields, which usually track the Fed rate hike expectations. Friday’s solid US jobs report boosted the odds for a Dec Fed rate hike and lifted the yields higher across the curve.

The major also remains supported amid risk-on rally in the global equities, as markets cheer the renewed signs of strength seen in the US economy. The pair now looks forward to the US LMCI release and Fedspeaks for further momentum.

USD/JPY Technical levels                 

To the topside, a daily close above 20-DMA located at 111.16 would shift risk in favor of a re-test of 111.45 (100-DMA) beyond which 111.71 (50-DMA) would be back on sight. A break below 110.53 (NY low) would open doors for 109.82 (Aug 4 low). A break lower would yield a test of 109.50 (psychological levels).