USD/JPY touches a high of 108.75 and looks towards the 109.00 handle
After testing support at the 108.00 handle yesterday, price recovered back to test the key hourly moving averages but failed to move above it. However, in Asian trading today, buyers managed to find a way past both the 100 and 200-hour moving averages as risk sentiment improved, which means that the near-term bias is now more bullish.
As price extended above the 108.50-60 swing region resistance, buyers are now attempting a move towards testing the 109.00 handle. There is some minor resistance seen around 108.75-80 but for the pair, the 109.00 handle will be the real test of any potential upside break in the coming sessions.
Risk sentiment continues to hold up well on the day with Asian stocks trading higher while US equity futures are roughly up by 0.6% currently. Treasury yields are also a tad higher with 10-year yields up by 1 bps to 2.713%.
Though markets may be in a cheery mood, it must be said that risk sentiment still remains fragile and all it takes is one or two headlines to unsettle things again. With the economic calendar looking rather void of any major risk-changing events, the most markets can feed off will be US-China headlines (if any).
In terms of downside exposure for USD/JPY, support is now seen @ 108.31-33 and then at the 108.00 handle followed by the 10 January low @ 107.77.
