USD/JPY climbs to multi-day tops, further beyond 106.00 mark
- USD/JPY gains traction for the third consecutive session amid receding safe-haven demand.
- A strong pickup in the US bond yields provided an additional boost and remained supportive.
- A convincing breakthrough the 106.00 mark seems to have set the stage for additional gains.
The USD/JPY edged higher for the third consecutive session on Tuesday and spiked to multi-day tops, around the 106.15 region in the last hour.
The pair added to the previous day's modest positive move and gained some follow-through traction amid receding demand for the safe-haven Japanese yen. The latest optimism over a potential vaccine and treatment for the highly contagious coronavirus disease remained supportive of the upbeat market mood.
It is worth recalling that the Trump administration is considering fast-tracking an experimental COVID-19 vaccine for use in the US ahead of the November 3 elections. Adding to this, the US FDA on Sunday said to have issued emergency authorization to use blood plasma to treat COVID-19 patients.
This coupled with the positive news on the US-China trade relations further boosted investors' confidence. In fact, the US Trade Representative’s Office said in a statement that both the US and China see progress made on resolving issues in phase one trade deal between the two countries.
Bullish traders further took cues from a strong pickup in the US Treasury bond yields, which extended some support, rather helped limit the intraday US dollar weakness. Meanwhile, the latest leg of an uptick over the past hour or so could be attributed to some technical buying above the 106.00 mark.
The mentioned level represents 200-hour SMA and a sustained move beyond might have already set the stage for further appreciating move. Some follow-through buying above the 106.20 area will reaffirm the positive outlook and lift the pair further towards the 106.50 horizontal resistance.
Technical levels to watch