USD/JPY pushes higher toward 108.00 on positive sentiment
- USD/JPY gains traction during American trading hours on Monday.
- Wall Street's main indexes trade in the positive territory.
- US Dollar Index pares early losses, turns flat near 97.50.
After spending the first half of the day fluctuating in a tight range a little above 107.00, the USD/JPY gained traction in the early American session and rose to its highest level in 20 days at 107.89. As of writing, the pair was up 0.47% on the day at 107.72.
USD/JPY capitalizes on upbeat market mood
Improving risk sentiment seems to be providing a boost to the pair by making it difficult for the JPY to find demand as a safe-haven.
The data from the US on Monday showed that Pending Home Sales surged by 44.3% in May and Dallas Fed Manufacturing Index rose sharply to -6.1 in June from -49.2 in May. In addition to the upbeat data, Florida's department health announced that confirmed coronavirus cases increased by 3.7% on Monday, lower than the previous seven-day average of 5.5%.
Supported by these developments, Wall Street's main indexes started to push higher. At the moment, the S&P 500 and the Dow Jones Industrial Average are gaining 1% and 1.7%, respectively, reflecting the risk-on environment.
Meanwhile, the US Dollar Index, which dropped to a daily low of 96.11, pared its losses and turned flat near 97.50, helping the bullish momentum of USD/JPY remain intact.
In the early trading hours of the Asian session on Tuesday, Industrial Production and Unemployment Rate data from Japan will be looked upon for fresh impetus.
Technical levels to watch for