USD/JPY consolidates above 111.00 despite US dollar weakness

• USD/JPY holds above 111.00 supported by higher US yields and risk appetite. 
• US Dollar Index breaks under 95.00 and drops to 3-week lows. 

The USD/JPY pair tested daily lows after the beginning of the US session but managed to hold on top. During the last hours moved modestly to the upside and rose back above 111.00. It is trading in a range between 111.10 and 111.00 currently testing the upper limit. 

The move to the upside took place despite a decline of the greenback across the board. The US Dollar Index is trading at 94.80, the lowest since August 2. The yen weakened amid risk appetite and higher US yields. In Wall Street, the Dow Jones is up 0.98% and the Nasdaq gains 0.90%. The 10-year yields rose from 2.82% to 2.849%. 

USD/JPY Levels to watch 

The pair is falling on Monday following a doji formation on Friday, signaling some bearish pressure. However, USD/JPY managed to hold on top of a short-term uptrend line that stands at 111.00. A consolidation below could signal more losses ahead. 

To the upside, resistance levels might be located at 111.10 (20-hour moving average), 111.30 and 111.45/50 (Aug 24 high). On the downside, support could be seen at 110.90/95 (daily low), 110.65/70 and 110.40.