USD/JPY off highs, back near 107.00 ahead of Yellen

After a brief test of highs near 107.30, USD/JPY is now returning to the 107.00 are ahead of Yellen’s speech.

USD/JPY focus on Yellen

The pair is snapping a 4-session negative streak today, bouncing off recent led-induced lows in the mid-106.00s on Friday following a re-emergence of the demand for the US dollar.

In the meantime, the greenback seems to have recovered the smile after the deep pullback on Friday, as market participants continue to push back expectations of a rate hike by the Fed. According to CME Group’s FedWatch tool, the probability of a rate hike in June has dropped to nearly 4%, and it is just above 30% for the month of July.

In the data space, the Fed’s Labor Market Conditions Index is due later ahead of the key speech on monetary policy by Chairwoman Janet Yellen.

USD/JPY levels to watch

As of writing the pair is up 0.49% at 107.05 facing the immediate up barrier at 109.22 (20-day sma) ahead of 109.58 (55-day sma) and finally 111.45 (high May 30). On the other hand, a breakdown of 106.38 (low Jun.6) would target 105.52 (2016 low May 3) en route to 105.18 (low Oct.15 2015).