USD/JPY: bulls committed to a test of 110.50?

USD/JPY is continuing to recover and had a pop at the midpoint of the mid point of the 110 handle.

USD/JPY is supported on further advances in European bourses and Wall Street keeps up with the pace adding fuel to the majors advance. Risk is on and oil markets are hunting down the $50bbl psychological mark, despite the EIA data that actually caused the price to drop on falling production, although the draw was larger than expected, mostly priced in from yesterday's API.

Nonetheless, the tone remains risk on, the VIX is down more than 3% and the dollar is better bid fundamentally on Central Bank divergence, so that is still all bad news for the Yen. However, whether spreads can get much wider longer term could be a factor preventing USD/JPY taking off and with the EU referendum and Fed interest rate decision all around the corner, volatility should pick up. Whether the Fed hikes once or twice this year, if at all, there is only so far rates can be hiked.

June? A live meeting? Come again?

USD/JPY levels

USD/JPY has stalled on initial test of the 110.50 psychological resistance. The pull backs are shallow and longs are building around the 59 dma at today's session lows so far at 109.85. Major support is seen at 108.85 while 111.90 is the key upside target to confirm that the market has based. On a break out to the downside again, the 200 month and 200 week moving averages are located 105.87/70 and could offer strong support.