USD/JPY sits near weekly tops, comfortably above 109.00 handle
- Renewed trade optimism helped the pair to reverse an early dip.
- Surging US bond yields remained supportive of the positive move.
- A subdued USD price action might keep a lid on any strong gains.
The USD/JPY pair built on its goodish intraday bounce and is currently placed near the top end of the weekly trading range, around the 109.20 region.
The pair managed to attract some decent dip-buying interest near the 108.65 region and witnessed a dramatic intraday turnaround after China's Commerce Ministry said that the US and China have agreed to cancel the tariffs imposed during their prolonged trade war.
Risk-on mood remained supportive
Investors cheered signs of progress in US-China trade talks and triggered a strong rally in the global equity markets, which weighed heavily on the Japanese Yen's safe-haven demand and turned out to be one of the key factors driving the pair higher.
Bullish traders further took cues from a strong upsurge in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond yield rallied over 3.5%, albeit a subdued US Dollar price action failed to provide any additional boost to the major.
Hence, it will be prudent to wait for a sustained move beyond the very important 200-day SMA and the recent swing highs resistance near the 109.25-30 region before traders start positioning for any further near-term appreciating move amid relatively thin US economic docket on Thursday.
Technical levels to watch