#USDJPY @ 138.483 -imp levels: gains traction for the second straight day and climbs to its highest level since mid-July.

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• USD/JPY gains traction for the second straight day and climbs to its highest level since mid-July.
• The risk-off impulse offers support to the safe-haven JPY and caps any further gains for the pair.
• The Fed-BoJ policy divergence, sustained USD buying, rising US bond yields favour bullish traders.
• Sustained break through the 136.65-136.70 resistance zone adds credence to the positive outlook.

The pair currently trades last at 138.483.

The previous day high was 137.76 while the previous day low was 136.19. The daily 38.2% Fib levels comes at 137.16, expected to provide support. Similarly, the daily 61.8% fib level is at 136.79, expected to provide support.

The USD/JPY pair stalls its intraday positive move near the 139.00 mark and retreats a few pips from the highest level since mid-July touched earlier this Monday. The pair slips back below mid-138.00s during the first half of the European session, though any meaningful pullback still seems elusive.

The risk-off impulse offers some support to the safe-haven Japanese yen and acts as a headwind for the USD/JPY pair. That said, a big divergence in the monetary policy stance adopted by the Fed and the Bank of Japan should cap gains for the JPY. Apart from this, the blowout US dollar rally to a fresh 20-year high and rising US Treasury bond yields should help limit the downside for the major.

From a technical perspective, the strong follow-through buying for the second successive day on Monday confirmed a breakout through the 137.65-137.70 resistance zone. This comes on the back of the recent strong bounce from the 100-day SMA and favours bullish traders. Hence, any subsequent downtick might be seen as a buying opportunity and is likely to remain limited, at least for the time being.

Traders now look to the 138.00 round-figure mark to offer some support ahead of the aforementioned resistance breakpoint, around the 137.70-137.65 region. A convincing break below might trigger some technical selling and accelerate the slide towards the 137.00 mark. The USD/JPY pair could eventually drop to the 136.80-136.75 intermediate support en route to the 136.45 support zone.

On the flip side, the 139.00 round figure now seems to have emerged as immediate resistance. This is followed by the 24-year high, around the 139.40 region touched in July. Some follow-through buying has the potential to lift the USD/JPY pair further towards the 140.00 psychological mark, which if cleared decisively should pave the way for a further near-term appreciating move.

Technical Levels: Supports and Resistances

USDJPY currently trading at 138.38 at the time of writing. Pair opened at 137.66 and is trading with a change of 0.52 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 134.85, 50 SMA 135.77, 100 SMA @ 132.65 and 200 SMA @ 124.36.

The previous day high was 137.76 while the previous day low was 136.19. The daily 38.2% Fib levels comes at 137.16, expected to provide support. Similarly, the daily 61.8% fib level is at 136.79, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 136.64, 135.63, 135.06
• Pivot resistance is noted at 138.22, 138.78, 139.79

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