USD/JPY: settled above 200 dma and not looking back, testing 108 handle out

Currently, USD/JPY is trading at 107.94, down -0.42% on the day, having posted a daily high at 108.50 and low at 107.89.

USD/JPY is making its mark above the 200 dma down at 105.14 and has gone on to take out the July highs of 107.49 while the greenback remains dominant on the back of the market's expectations for a spell of inflation in the US economy forcing the hand of the Fed to become more active throughout 2017 and in stark contrast to that of the BoJ. "US interest rate differentials are widening against Germany and Japan, which gives the greenback additional support," noted analysts at Brown Brothers Harriman. 

Meanwhile, analysts at Bank of Tokyo Mitsubishi explained, "The sell-off in global bonds could increase upward pressure on the BoJ’s 10-year JGB yield target at 0.00% encouraging speculation that the BoJ may have to accelerate purchases weighing on the yen as well."

USD/JPY levels

Current price is 107.94, with resistance ahead at 108.00 (Hourly 20 EMA), 108.06 (Daily Classic R3), 108.40 (Daily Open), 108.40 (Monthly High) and 108.40 (Weekly High). Next support to the downside can be found at 107.89 (Daily Low), 107.50 (Daily Classic R2), 107.12 (Daily Classic R1), 106.71 (Yesterday's Low) and 106.56 (Daily Classic PP).