USD/JPY rises to test 5-month highs and drops back below 111.00

USD/JPY gained momentum during the American session but then pulled back. The pair rose to 111.34, to test weekly highs and failed to break higher. Afterward retreated and it was trading at 110.96/99, around the same level it closed yesterday. 

Greenback gained momentum after the release of the US existing home sales report that showed a rise of 2.0%, that surprised market analysts who expected a decline of 0.5%. Tomorrow will be the most important day regarding US data with the durable goods orders report and the FOMC minutes. 

The US dollar is showing less strength today as US bond yields drop modestly for the second day in a row. Also, US equity markets moved off session highs during the last hours. 

USD/JPY keeps testing 111.35/40

The area around 111.15/30, continues to be a key resistance. The pair tested the mentioned area today but failed to break higher. The current correction from the highs could signal an extension if it drops under 110.85 where the 20-hour moving average currently stands. 

To the upside, a consolidation on top of 111.30 could open the doors to 111.50 and above here attention would turn to 112.00. 

To learn more about this topic, check our video analysis.