USD/JPY jumps to seven-day tops, around 105.75 region

The USD/JPY pair built on its goodish intraday positive move and shot to seven-day tops, around the 105.70-75 region during the early North American s  |  20/10/2020 14:27
  • USD/JPY gained some strong positive traction on Tuesday and shot to seven-day tops.
  • The upbeat market mood undermined the safe-haven JPY and remained supportive.
  • The strong move up seemed rather unaffected by a softer tone surrounding the USD.

The USD/JPY pair built on its goodish intraday positive move and shot to seven-day tops, around the 105.70-75 region during the early North American session.

The pair added to the previous day's modest uptick and gained some strong follow-through traction on Tuesday, rather unaffected by a softer tone surrounding the US dollar. The uncertainty over the next round of the US fiscal stimulus kept the USD bulls on the defensive through the first half of the trading action on Tuesday.

The negative factor, to a larger extent, was offset by a solid rebound in the US equity markets, which undermined the safe-haven Japanese yen and was seen as a key factor driving the USD/JPY pair higher. Meanwhile, a strong pickup in the US Treasury bond yields, though failed to revive the USD demand, remained supportive of the move.

The intraday buying around the USD/JPY pair picked up pace during the early North American session, which took along some short-term trading stops placed near the 105.60-65 region. Hence, the latest leg of a sudden spike over the past hour or so could further be attributed to some technical buying above the mentioned barrier.

On the economic data front, the disappointing release of the US Housing Starts, coming in at 1.415 million for September, was negated by slightly better-than-expected Building Permits, which rose to 1.553 million during the reported month. The data did little to influence the USD/JPY pair or hinder the ongoing move up.

Given the self-imposed deadline by The US House of Representatives Speaker Nancy Pelosi to reach a deal with Republicans, the key focus will remain on developments surrounding the US fiscal stimulus measures. This, along with the broader market risk sentiment, will assist traders to grab some meaningful trading opportunities.

Technical levels to watch

 

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