USD/JPY jumps approaching 112.00 as USD rally accelerates

  • US dollar unstoppable prints fresh monthly highs across the board.
  • USD/JPY up for the sixth consecutive day, rises above June highs.

The USD/JPY gained momentum during the American session amid a broad-based rally of the US dollar. It climbed to 111.88, reaching the highest level since February 2020. It is holding onto all gains, on its way to the second-highest daily close since April 2019.

The rally of the US dollar takes place despite the recovery in US stocks and lower US yields. The Dow Jones is up by 0.55%, and the Nasdaq gains 0.77%. The US 10-year yield stands at 1.51%, significantly above last week level, but away from the 1.56% high. The DXY rose above 94.00 and reached at 94.25, the highest since November 2020.

The greenback is having the best day in months showing a particular strength amid end-of-month flows. Crude oil is up by 1.70%, while gold trades at monthly lows under $1730/oz and silver tumbles more than 4%

Eyes on 112.00

If the upside continues, USD/JPY will likely challenge 112.00; above the next level to watch is the 2020 high at 112.22, followed by the 2019 high at 112.39. As seen, the area between 112.00 and 112.40 is a long term barrier. A consolidation above should clear the way to more gains.

On the flip side, now 111.65 is the immediate support and a slide below could point to some stabilization in the very short-term. The next support stands at 111.20 (Sep 29 low).

Technical levels