USD/JPY Forecast: Approaching this year’s high, bullish

• The June Jibun Bank Manufacturing PMI is foreseen at 52.3 from 53 in May.

• Wall Street flirted with record highs, providing support to USD/JPY.

• USD/JPY has room to extend its advance beyond the current 2021 high at 110.96.

The USD/JPY pair hit an intraday high of 110.78, underpinned by a positive mood, reflected by Wall Street extending gain toward record highs. Government bond yields saw little action, with the yield on the 10-year US Treasury note comfortably consolidating below the 1.50% level and failing to provide directional clues to USD/JPY.

This Wednesday, the Bank of Japan will release the Minutes of its latest meeting. Japan will publish the preliminary estimate of the June Jibun Bank Manufacturing PMI, foreseen at 52.3 from 53 in May, and the April Leading Economic Index, expected to be confirmed at 103.

The USD/JPY pair keeps approaching this years high at 110.96. The risk is skewed to the upside according to near-term technical readings, and despite the pair easing from the mentioned daily high. In the 4-hour chart, the pair has continued to advance beyond its moving averages, which slowly gain bullish strength. Technical indicators are retreating with uneven strength from intraday highs, holding within positive levels.

Support levels: 110.50 110.05 109.70

Resistance levels: 110.95 111.30 111.80