The 137.00 hurdle represents the immediate significant barrier for USD bulls
The dollar has settled around more than one-week lows below the 104.00 figure on Monday, struggling to attract buying pressure as risk sentiment remains upbeat at the start of a new trading week. The Japanese yen is slightly higher on the day due to some weakness surrounding its US counterpart. Following Friday’s rally on Wall Street, Asian stocks advanced across the board today, with European indices following suit as oversold markets proceeded to an upside correction.
USDJPY is back under pressure after some modest recovery witnessed ahead of the weekend. The pair has settled around the 135.00 mark, struggling to overcome the 135.40 immediate barrier on the way to 24-year highs seen last week around 136.70. Despite the ongoing retreat, the overall technical picture remains bullish, with the overall uptrend intact, especially as the dollar holds above the ascending 20-DMA last seen nearly a month ago.
Furthermore, the pair could hit 140.00 in the coming weeks should the US Treasury yields continue to move north in the short term. But first, the greenback will have to overcome the 137.00 hurdle that represents the immediate significant barrier for USD bulls.
The Bank of Japan’s June meeting Summary of Opinions showed that the central bank will maintain its loose policy. In contrast, the Federal Reserve continues to signal its commitment to aggressive policy tightening aimed at tempering inflation that continues to rise across the globe.
In the immediate term, as the USD lacks demand, USDJPY could spend some time in consolidation before resuming the ascent towards the mentioned targets. On the downside, the nearest support now arrives at 134.25, followed by the mentioned moving average, currently at 133.55. On the weekly timeframes, the pair looks steady after four bullish weeks in a row.