The US dollar extends its winning streak versus the Japanese Yen into a third day this Tuesday, now accelerating the advances in a bid to regain 114.50 barrier.

USD/JPY takes-out May tops, what next?

The bulls remain unstoppable and now aim to reach 115 handle, as monetary policy divergence between the Fed and BOJ continue to remain in play, especially after the Fed policymaker Williams hinted at a start to the balance sheet normalization process in the next few months, while suggesting it is reasonable to expect one more rate hike this year. Meanwhile, the BOJ Governor Kuroda said a day before that the Japanese central bank will adjust the policy whenever necessary.

Moreover, a steepening Treasury yields curve also remains USD positive, collaborating to the upside in the USD/JPY pair, while on the JPY-side of the equation, a risk-on rally in the global equities combined with higher oil prices dampened the demand for safe-havens such as the Yen, thus, helping the spot to reach the highest levels since March this Year.

The spot now eagerly awaits the sentiment on the European open for the next push higher, while the US JOLTS job openings data and FOMC member Brainard’s speech will provide fresh trading impetus in the NA session.

USD/JPY Technical levels                 

At 114.40, resistances are aligned at 114.50 (psychological levels), 115 (key resistance) and 115.52 (Mar tops). “On the flip side, the 114.00 handle now seems to guard the immediate downside, which if broken could prompt some profit taking slide back towards 113.30 support area with some intermediate support near 113.75 region,” Haresh Menghani, Analyst at FXStreet noted.