USD/JPY rebounds and hits fresh highs above 113.50

USD/JPY fell to 112.89 and rebounded strongly. The pair broke above previous daily highs and climbed to 113.54. It was hovering around 113.50, up for the day, after falling almost 300 pips during the previous two trading days. 

Greenback recovered momentum during the last hours. Previously spiked lower across the board despite the release of a better-than-expected PMI manufacturing reading for the month of January, that showed the strongest reading since March 2015. 

Now the US dollar is holding a strong bullish momentum in the market, as US bonds decline and equity prices in the US rise. The Dow Jones was up 0.37% while the Nasdaq was rising 0.28%. The 10-year yield was at 2.245%, above yesterday’s opening level. 

Technical levels 

To the upside, resistance level might be located at 113.60 (Jan 16 low),114.05 (yesterday’s American session high) and 114.40 (Jan 19 low). On the flip side, support could be seen at 112.85/90 (American session low), 112.50 (daily low) and 112.00 (psychological).