USD/JPY extends gains to test last week highs

The US dollar remains strong in the market supported by yesterday’s rate hike and statement from the Federal Reserve and today with US economic data. USD/JPY continued to rise during the American session and is testing last week highs. 

The pair recently reached 110.77, the highest level since last Friday. It was trading at 110.55/60, still holding a bullish tone. The area around 110.70 is a relevant technical level. A break above could open the doors to further gains and it would reinforce the reversal that started 22 hours ago. From yesterday’s lows, the pair has risen almost two hundred pips. On the opposite direction, if the US dollar fails again, a correction toward 110.00/20 looks likely. 

The greenback is holding a strong tone. Yesterday’s statement and today’s US economic data (jobless claims, Empire Manufacturing and Philly Fed) offset the weak reading on Wednesday of the CPI index and the retail sales report. 

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Fed raises rates by 25 bps; second hike of 2017

Technical levels 

To the upside, resistance levels are seen at 110.70/80, 111.00 (psychological) and 111.25 (May 31 high). On the flip side, support could be located at 110.35 (Jun 14 high), 109.90 and 109.25 (daily low).