USD/JPY to see further gains above the 104.40 monthly high

USD/JPY is trading around 104.00, also around the 23.6% retracement of its January advance, as a better market mood helped the pair to recover some ground. USD/JPY is technically neutral and needs to advance past 104.40 to gain further traction, FXStreet’s Chief Analyst Valeria Bednarik briefs. 

Key quotes

“The market’s mood is in better shape this Tuesday, weighing on safe-haven dollar and yen. The sentiment was boosted by comments from former Fed’s chair Janet Yellen, who has been nominated by Joe Biden as Treasury Secretary. Yellen is meant to speak in front of the Senate Finance Committee. Her prepared remarks are already out, showing that she believes that is time to ‘act big,’ spend now and worry about deficits later.”

“In the 4-hour chart, the USD/JPY pair has advanced above all of its moving averages, which anyway remain directionless. Technical indicators recovered to above their midlines but quickly lost directional strength, indicating limited buying interest.” 

“A long-term descendant trend line offers resistance in the 104.30 area, while the monthly high has been set at 104.39.”