USD/JPY clocks fresh 3-month highs at 104.75

The USD/JPY pair extended its sharp reversal from 104.30 in the European session, and now looks to test 105 handle, in response to strengthening US treasury yields.

USD/JPY trade above all major DMAs

The bulls regained poise over the last hour and pushed the rate higher beyond 104.50 barrier, largely on the back of rising treasury yields across the curve, which remain underpinned amid increasing calls for a Dec Fed rate hike. The USD/JPY pair is last seen exchanging hands at 104.66, hovering near fresh 3-month highs of 104.75, up 0.18% on the day.

Moreover, markets prefer to hold the US dollar heading into a slew of US economic reports, with the highly influential US durable goods (a precursor to the US GDP data) lined up for release later in the NA session.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 104.73 (daily R1). A break above the last, the major could test 105 (psychological levels) and 105.34 (Jul 27 high) beyond the last. While to the downside, the immediate support is seen at 104.29 (5-DMA) next at 104.04 (10-DMA) and below that at 103.85 (20-DMA).