FxWirePro: USD/JPY extends gains to test 20-DMA at 109.36, risk-on along with rising UST yields support

USD/JPY chart on Trading View used for analysis

• USD/JPY edges higher for the 4th straight session, trades 0.10% higher on the day at 109.35.
   
• The pair trades with a bullish bias and breakout at 20-DMA could see further upside. Risk-on and US yields rising supporting the dollar higher. 
   
• Data on Thursday released by the U.S. Bureau of Labor Statistics showed that initial weekly jobless claims decreased by 3,000 to 213,000 in the week ending January 11. 
   
• Further, the Philly Fed Index revealed that the business activity in the manufacturing sector expanded at a more robust pace than expected.
   
• Japan inflation at 7-month low, no closer to BoJ's 2% target. Could put the BOJ under pressure to ramp up an already massive stimulus program.
   
• US dollar tumbled across the board overnight following report that US is considering lifting China tariffs.
   
• However, U.S. Treasury spokesman denied the report about officials considering the option of lifting tariffs on Chinese imports. 
   
• Technicals support upside in the pair. RSI is rising, Stochs are biased higher, MACD shows bullish crossover on signal line.
   
• Break above 20-DMA could see test of 61.8% Fib. While break below 5-DMA to see weakness.

Recommendation: Watchout for break above 20-DMA to go long.

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.