USD/JPY extends bullish momentum further beyond mid-109.00s

   •  A strong follow-through USD buying helps move out of the recent trading range.
   •  Bulls also seemed to track rising US bond yields amid Fed rate hike speculations.

The USD/JPY pair gained some strong traction on Wednesday and was now seen building on its move further beyond mid-109.00s.

The pair gained traction in light of a strong follow-through US Dollar buying interest and finally managed to break out of its 3-day old consolidative trading range. The greenback was supported by a goodish pickup in the US Treasury bond yields amid rising speculations over a steeper Fed monetary policy tightening cycle. 

Market participant saw a strong rally in crude oil prices, triggered the US President Donald Trump's decision to pull out from an international nuclear deal with Iran, resulting into higher inflationary pressure and might force the Fed to raise interest rates faster than is already priced in the market. 

Meanwhile, a mixed sentiment around Asian equity markets did little to influence the Japanese Yen's safe-haven demand, with the USD price dynamics acting as an exclusive driver of the pair's bullish move through the Asian session on Wednesday.

On the economic data front, the release of the US Producer Price Index (PPI), due later during the early NA session, would now be looked upon for some fresh impetus. 

Technical outlook

“The resistance of the trendline sloping downwards from the November high and December high stands at 109.73 today. A close above that level would add credence to the rebound from the rising trendline support and would odds of the pair finding acceptance above 110.04,” writes Omkar Godbole, Analyst and Editor at FXStreet.

He further adds: “Failure to build on the rebound from the rising trendline support and a drop below the gradually descending (bearish) 100-day MA would open the doors to 107.18 (50- day moving average).”