Pulled Back To 110.00

A weaker greenback saw USD/JPY decline on Monday, the pair briefly dipped below the 110 handle to touch 109.96 before rebounding slightly, the pair last trades at 110.19. USD declined as stocks rose amid a supportive risk environment, while ISM data showed service providers in the US recorded the fastest pace of growth on record in March.

• From a technical perspective USD/JPY is edging off recent highs, with prices very briefly showing below the Y110 handle. The climb on Mar 26 above 109.36, the Mar 15 high confirmed a resumption of the uptrend and note, 109.56 has been breached, a key retracement - 76.4% of the Mar 2020 - Jan downleg. This sets the scene for a climb towards 111.30 next, Mar 26, 2020 high. Overbought conditions are still not impacting this trend and instead continues to reinforce current sentiment. 108.41 is key support.
• A limited economic docket from Japan today, Labour Cash Earnings/Household Spending lead the way at 0030BST/0730HKT, the pace of decline in spending is expected to have slowed after the state of emergency was lifted and encouraging retail sales during the period. Later in the session the MOF will bring 30-year supply to the market.