The USD/JPY pair is on a positive note as it builds on Friday’s rebound from the 129.65 region. The pair has touched new daily highs around the 131.75 region in the early North American session.
USD/JPY Pair Continues to Rise, Touches New Highs
The USD/JPY pair has been on a steady rise since Friday’s rebound from the 129.65 region, which was its lowest level since February 03. The pair has continued its upward momentum on Monday, as it touched new daily highs around the 131.75 region in the early North American session.
The positive move can be attributed to a number of factors, including the overall strength of the US dollar and the weakness of the Japanese yen. The US dollar has been gaining ground against major currencies due to the ongoing economic recovery in the United States, fueled by the successful rollout of COVID-19 vaccines and the massive stimulus package passed by the government.
Meanwhile, the Japanese yen has been under pressure due to the Bank of Japan’s ultra-loose monetary policy and the country’s struggle to contain the COVID-19 pandemic. Japan has been facing a surge in infections, which has led to a state of emergency being declared in several regions, including Tokyo.
In terms of technical analysis, the USD/JPY pair appears to be in a bullish trend. The pair has broken through the key resistance level of 131.00, which had been acting as a major barrier to further upside. The next major resistance level to watch is around the 132.00 region, which could provide some headwinds for the pair.
The moving averages are also showing a bullish trend, with the 50-day moving average crossing above the 200-day moving average. This is a positive signal for the pair and could indicate further upside potential.
Factors to Watch
There are several factors that could impact the USD/JPY pair in the coming days and weeks. One of the key factors to watch is the US Federal Reserve’s monetary policy. The Fed has indicated that it will maintain its ultra-loose monetary policy for the time being, but any hints of tightening could lead to a sell-off in the US dollar and a corresponding rise in the Japanese yen.
Another factor to watch is the ongoing COVID-19 pandemic. If Japan is able to contain the virus and the economy recovers, it could lead to a stronger yen. On the other hand, if the situation worsens, it could lead to further weakness in the yen.
In conclusion, the USD/JPY pair has been on a steady rise since Friday’s rebound and has touched new daily highs in the early North American session. The overall strength of the US dollar and weakness of the Japanese yen are driving the pair higher, along with positive technical indicators. However, there are several factors to watch in the coming days and weeks, including the US Federal Reserve’s monetary policy and the ongoing COVID-19 pandemic. Traders should keep a close eye on these developments and adjust their positions accordingly.