USD/JPY inches higher to 110.40, seems set for further up-move

The USD/JPY pair maintained its bid tone through early NA trading session and has now climbed to session high level of 110.40.

Despite of the broader USD retracement across most major currencies, the Japanese currency remained under pressure on improving risk sentiment across global financial markets.

The pair is inching closer to a three-week high of 110.60 touched on Friday last week. Moreover, the pair is now comfortably holding above 50-day SMA. Hence, a clear break above 3-week high level should pave way for additional upward momentum for the pair in the near-term.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "Short term, the 1 hour chart shows that price is currently consolidating above a horizontal 100 SMA, whilst the technical indicators are flat within positive territory, but with no clear directional strength. In the 4 hours chart, the pair presents a neutral-to-bullish stance, given that the price is well above its moving averages and the technical indicators above their mid-lines, but lacking enough strength to confirm an upward continuation The pair is getting closer to a major resistance level, 110.60, and it could break above it on better-than-expected PMI readings in the US. Large stops are suspected above it, which means the rally can accelerate afterwards and send the pair beyond 111.00."