USD/JPY: Upside capped by 105.70/75

The USD/JPY pair is seen consolidating at three-week highs in the upper band of 105 handle, as the bulls take a breather after the relentless rise in response to impending stimulus talks.

JP Helicopter Money Speculations

USD/JPY hovers above 105.50 levels

The ongoing speculations surrounding the helicopter money from the Japanese officials continue to weigh on the Japanese currency, keeping USD/JPY within a striking distance of multi-week highs printed at 105.75. At the time of writing the USD/JPY pair is seen hovering around 105.60, up +1.05% on the day.

Moreover, resumption of the post-Brexit risk-on rally in the European equities also added to the bullish sentiment around the major. Looking ahead, markets eagerly anticipate a BOE rate cut in a bid to build further gains above 106 barrier in the USD/JPY pair.

USD/JPY Technical levels to watch

In terms of technicals , the immediate resistance is located at 105.75/84 (3-week tops/ 50-DMA). A break above the last, the major could test 106 (round number). While to the downside, the immediate support is seen at 105 (resistance-turned support) and below that at 104.28 (daily pivot).