USD/JPY retreats from highs, back to 115.80

The greenback remains on a firm footing vs. the Japanese currency on Monday, with USD/JPY briefly testing fresh tops above 116.00 the figure.

USD/JPY in 10-month peaks

The pair is extending its rally for the sixth week in a row today, piercing the 116.00 handle for the first time since January although slipping back towards the 115.80 area soon afterwards.

Spot keeps it upside unabated for the time being, as the solid performance from yields in the US money markets stay as the almost exclusive driver for the underlying bullish sentiment.

Furthermore, the rally in crude oil prices has been boosted further after non-OPEC producers have agreed on Saturday in Vienna to cut the oil output, adding to the previous OPEC deal. The recent deal fuelled the risk-on trade, adding further selling pressure to the safe have JPY.

In the data space, JPY speculative net shorts have climbed further during the week ended on December 6, reaching the highest level since early-August 2015 according to the latest CFTC report.

USD/JPY levels to consider

As of writing the pair is advancing 0.47% at 115.91 facing the next resistance at 116.12 (high Dec.12) ahead of 116.86 (78.6% Fibo of the 2016 drop) and finally 117.53 (high Feb.8). On the other hand, a breach of 112.99 (620-day sma) would aim for 112.84 (low Dec.5) and then 111.32 (low Nov.28).