USD/JPY spikes to session peak, aiming to reclaim 115.00 mark

The USD/JPY pair built on previous session's strong ADP report-led breakout momentum above the 50-day SMA hurdle and spiked to the highest level since mid-Feb.

Currently trading around 114.85-90 region, testing session tops, continuous upsurge in the US treasury bond yields underpinned the greenback demand and have been supportive of the pair's strong up-move for the second straight session. The latest read on the US labor market, ADP report, bolstered expectations that the Fed would eventually raise interest rates at its meeting next week and led to a fresh wave of sell-off in the treasuries, lifting the 10-year yields to near three-month highs.

Meanwhile, possibilities of some stops being triggered on a sustained move above 114.60-65 area might have also collaborated to the pair sharp spike during early European trading session.

Later during the day, ECB monetary policy-led expected spurt in volatility would influence the Japanese Yen's safe-haven demand and provide some fresh impetus ahead of the usual weekly jobless claims data from the US. 

Technical levels to watch

Bulls would be aiming for a break through 114.95 level (Feb. 15 high), above which the pair is likely to dart towards 115.35 resistance level, en-route the next major hurdle near 115.75 region.

On the downside, retracement back below 114.65-60 area could get extended towards session lows support near 114.35 area, which if broken seems to drag the pair back towards 50-day SMA resistance turned support near 114.05 region.