USD/JPY regains poise, on its way to 113.00?

The USD/JPY pair caught a fresh bid-wave last hours, providing extra legs to the bullish momentum in the major and therefore, taking the rate back towards eight-month peaks reached a day before.

USD/JPY: 113 back on sight

The dollar-yen pair finally broke its overnight consolidative phase to the upside, as the US bulls regained poised, sending the US dollar index to fresh thirteen-year tops at 101.97 levels amid increased expectations of a tighter rate path to be implemented by the Fed in the upcoming months. Meanwhile, the CME Fed Watch tool showed that chances for a Dec rate hike now stands 93.5%.

Moreover, persisting risk-on market profile, triggered by overnight rise in oil prices and higher Asian equities, weigh on the safe-haven yen and hence, collaborate to the upbeat momentum behind USD/JPY.

Yesterday’s FOMC minutes turned out hawkish and bolster Dec rate hike bets, while the US durable goods data staged a solid rebound, with analyst at Nomura noting, “Strong performance in October is partially attributable to a sharp 94.1% jump in nondefense aircraft orders, which tend to be highly volatile.”

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 113 (multi-month high). A break above the last, the major could test 113.39 (daily R1) and 114 (zero figure) beyond the last. While to the downside, the immediate support is seen at 112.42 (daily low) next at 112.10 (daily pivot) and below that at 111.65 (5-DMA).

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