- USD/JPY continued gaining traction for the second consecutive session on Thursday.
- The positive move was fueled by some strong follow-through USD buying interest.
- The USD bulls maintained their dominant positions after mixed US macro releases.
- Bulls seemed rather unaffected by the risk-off mood amid fresh coronavirus jitters.
The USD/JPY pair jumped to fresh weekly tops, around the 107.45 region during the early North American session, albeit quickly retreated few pips thereafter.
The pair built on its goodish recovery move from the 106.00 neighbourhood, or seven-week lows set on Tuesday and gained traction for the second consecutive session. The momentum was exclusively sponsored by some strong follow-through US dollar buying interest and seemed rather unaffected by the prevalent risk-off mood.
The greenback remained in demand on Thursday and added to the overnight gains amid growing market worries that a surge in the number of new coronavirus cases could trigger fresh lockdown measures. This, in turn, will impact the economic recovery and continued boosting the USD’s status as the global reserve currency.
The USD bulls held on to their dominant position following the release of upbeat Durable Goods Orders from the US, which, to a larger extent, negated rather unimpressive Initial Weekly Jobless Claims data. Meanwhile, the final version of the Q1 GDP report confirmed that the economy contracted by 5% annualized pace.
Meanwhile, bullish traders seemed rather unaffected by the selling bias surrounding the equity markets, which points to deteriorating risk sentiment and tends to underpin the safe-haven Japanse yen. Even a fresh leg down in the US Treasury bond yields also did little to hinder the USD/JPY pair’s intraday positive move.
The pair retreated around 15-20 pips from daily tops and was last seen trading around the 107.25-30 region. The set-up, however, seems tilted firmly in favour of bullish traders. Hence, a subsequent positive move towards last week’s swing high, around the 107.65 region, remains a distinct possibility.
Technical levels to watch