USD/JPY: Bulls regain poise, 109.00 – a whisker away

• Re-attempts 109 handle as DXY stalls the corrective slide.
• Positive tone on the European equities underpins risk-on sentiment.

The USD bulls are back in control in the European session, now pushing the USD/JPY pair further towards the 109 handle.

The renewed strength seen in the spot can be mainly attributed to the resurgent USD demand across the board, as the European traders hit their desks and continue to ride the dollar buying-wave. Meanwhile, the 10-year Treasury yields brace for another run up to 3 percent critical level.

Also, the risk sentiment improves further, with the European equities catching fresh bids, reduces the safe-haven demand for the Yen, in turn collaborating to the latest leg up in the pair.

Further, according to a fresh Reuters report, the Japanese importers are expected to step in ahead of the monthly closing/ the Golden Week holidays on April 30, May 3 and 4.

The immediate focus now remains on the US macro news, including the CB consumer confidence and new home sales data for near-term trading opportunities.

USD/JPY levels to watch

Omkar Godbole, Analyst at FXStreet explains his take on the spot going ahead. “The USD/JPY pair closed yesterday above 108.50 - 38.2 percent Fibonacci retracement of the Jan-March sell-off - opening doors for a rally to 110.00.  So, the spot could soon test supply around 110.02 (61.8 percent Fibonacci retracement). However, the overbought conditions as shown by the hourly and 4-hour relative strength index and the presence of downward sloping (bearish biased) 100-day MA around 108.99 could yield consolidation or a minor pullback.”

“The hourly chart shows a bearish price RSI divergence, meaning the pair could test support at 108.50 (38.2 percent Fib support) before rising to 110.00 levels as indicated the bullish daily chart,” Omkar adds.