USD/JPY touches a high of 111.16
And looks to test a break of the 111.14 high last seen on 3 July. The next key resistance following this will be the 21 May high of 111.40.
It's been a steady start to the day for the dollar, as it advances against most major currencies and the dollar index now trades back above the 94.00 handle and is up by 0.1% on the day. The yen meanwhile remains weak as the Nikkei continues to push higher - now up 0.9% - as the risk sentiment in the market is still relatively positive.
As for USD/JPY, buyers need to sustain a firm daily break above the 111.00 handle in order to find conviction for a further move higher in the pair. So far, trading the pair remains trading risk sentiment in the market - and more specifically, the trade tensions between US and China.
With the issue staying quiet since Friday's tariffs implementation, the market looks to be fading further fears of an escalation in the trade rhetoric and that has been the case for majority of the year so far. But with all things related to the trade spat between the two powerhouses, be wary of headline risks. That has been the key driver of risk sentiment lately but for now, it appears to have toned down quite a bit.
