USD/JPY Recovery Gains Momentum to Reclaim 108.00 Level
bulls extended the pair's firm bid tone, pushing the pair through
108.00 handle for the first time since late April to a 2-week high level
The pair's sharp move on Monday was on the back of comments from Japan’s finance minister Taro Aso that the ministry is prepared to intervene if the exchange rate volatility remains at an elevated level and specially if the Yen starts strengthening again. The recent decline in the USD/JPY pair has been a key concern for the Japanese policy makers as a stronger domestic currency makes exports less competitive.
The pair has now broken-out of a short-term ascending trend-channel formation on H1 and hence seems more likely to build on to its recovery momentum.
Technical levels to watch
The pair's ongoing momentum is likely to get extended and now seems to aim towards testing 20-day SMA resistance, currently near 108.80 level, which if cleared should further boost the pair beyond 109.00 handle, towards its next major resistance near 109.40-45 zone.
On the downside, 108.00 round figure mark now seems to protect immediate downside. Any subsequent weakness below this immediate support might now be limited by support near 107.60-50 area.