USD/JPY: Bulls unstoppable, conquer 111 handle

The bulls extend their control in the Asian morning this Monday, driving USD/JPY to fresh multi-week highs at 111 handle amid risk-on rally in the equities.

USD/JPY: 100-DMA next on sight

The dollar-yen pair is seen extending its robust recovery mode from 20-DMA support located at 109.45 and from there on jumped nearly 150 pips after the Japanese currency slumped on the ongoing chatter that Japanese PM Abe is likely to delay sales tax hike plan by 2.5 years.

Moreover, a risk-on rally witnessed in the Asian markets, especially with the Japanese stocks leading from the front, added to the upbeat momentum seen in the major. At the time of writing, USD/JPY jumps +0.58% at fresh five-week highs at 111 the Nikkei 225 index prints fresh highs at 16,985, up +0.85% so far.

Meanwhile, markets will continue to track the broader market sentiment amid low volumes and limited volatility as the US markets remain closed on a Memorial Day holiday. Looking ahead, this week holds the main risk event for the major, the US payrolls data, which will have major influence on the Fed’s rate hike decision and hence, on further USD moves.

USD/JPY Technical levels to watch

In terms of technicals, the immediate resistance is located at 111.36/45 (April 5 High/ Daily R3). A break above the last, the major could test 111.97 (100-DMA). While to the downside, the immediate support is seen at 100.38/37 (5-DMA/ Daily low) and below that at 110 (round number).