USD/JPY trades at the highs for the day around 109.18
More noticeably, price is starting to feel more comfortable holding a break above the 109.00 handle with buyers also looking to secure a firm break above the 200-day MA (blue line).
That will shift the bias in the pair to be more bullish but I reckon buyers will feel more comfortable only if price starts to chase a move above the 61.8 retracement level @ 109.37 instead - which limited the early November gains.
As things stand, it is still all about the US-China trade rhetoric for yen pairs and the mood is that of cautious optimism so far this week.
Talks of a "broad consensus" and being "very close" to a deal is helping to keep USD/JPY slowly inching higher but are we building up towards a 'buy the rumour, sell the fact' play?
That is certainly a possibility, especially if the details of the "Phase One" deal fail to amount to anything significant that may help bridge the gap between the two countries in the big picture - which is almost certainly going to be the case.
It may not immediately take place but it will be something to be wary about in case markets get too exhausted in chasing the optimism over the past few weeks.
As for today, just be mindful of large expiries all over the place in USD/JPY. There is a hefty chunk around 108.90-00 and 109.15 that may help to limit any near-term drop and at the same time also cause price action to be more sticky around current levels.
