USD/JPY: rallies 1% through key resistance and to 110.64 the high

USD/JPY is currently trading at 110.41 vrs a days range of 109.82 - 110.64 and is up 1%.

Investors were relieved after the first round of the French elections resulted in an expected victory for Le Pen and Macron. The latest French interior ministry count had Le Pen at 24.38% vs Macrons 22.19%. 

However, while the markets are thin gaps were wide and could be closed again on a reversal especially considering the risks to the EU Le Pen's party carries in the near term. The underlying concerns over the EU and EZ project remain a market driver and supportive of the yen in the longer run. 

Meanwhile,  analysts at Brown Brothers Harriman explained that the dollar needs to move back above JPY110 to remove the downside pressure.  "The technical indicators are somewhat more encouraging.  The MACDs are trying to turn higher, and the Slow Stochasitics did not confirm a move to JPY108 in the spot market and also seem poised to cross higher," explained the analysts. 

USD/JPY levels

USD/JPY has recently recovered from the 55-week ma at 108.36 and today's price action has seen the major rally through a key resistance line of 109.88. On a continuation of the uptrend, the next major resistance line could come as the 55-day ma at 112.08 according to analysts at Commerzbank. who explained that only above 115.62 they would look for a challenge to the key short-term resistance offered by the 16-month resistance line at 117.18.  "Below 108.13 will target 107.50 July 2016 high and possibly 106.85, the 61.8% retracement and we cannot rule this out but this is not our favoured scenario."

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