USD/JPY surges through 113.00 mark to hit fresh 8-month highs

A fresh bout of greenback buying interest emerged during early European session, with the USD/JPY pair surging through 113.00 handle to hit a fresh eight-month high.

Currently trading around $113.35-40 band, the greenback remained underpinned by December Fed rate-hike expectations, which got an additional reinforcement from Wednesday's FOMC meeting minutes and strong US durable goods orders. 

Moreover, Thursday's disappointing Japanese manufacturing PMI coupled with the prevalent risk-on mood, as depicted by positive sentiment surrounding European equity markets, is further weighing on the Japanese Yen and extending support to the pair's strong up-move.

Meanwhile, possibilities of stops getting triggered on a decisive move above 113.00 handle might have also contributed to the pair's sharp up-surge in the past hour. In absence of any major economic releases, the pair would continue to take clues from the broader market risk sentiment. 

With short-term indicators pointing to highly overbought near-term conditions, the pair might take a brief pause amid thin liquidity conditions on the back of Thanksgiving holiday in the US.

Technical levels to watch

Immediate resistance beyond 113.50 level is pegged near 113.70-80 region (late March highs) above which the pair seems all set to surpass 114.00 handle and aim towards testing March monthly highs resistance near 114.50 region. On the downside, 113.00 level now becomes immediate support, which if broken might drag the pair back towards session low support near 112.40 ahead of 112.00 round figure mark.

To learn more about this topic, check our video analysis