USD/JPY analysis: fresh yearly highs and counting
|USD/JPY Current price: 114.39
- US Treasury yields hit multi-year highs following solid US data.
- Wall Street extends rally, DJIA at unchartered territory.
The USD/JPY pair reached fresh 2018 highs on broad dollar's strength and as US Treasury yields soared, with the yield on the 10-year Treasury note hitting 3.17%, its highest level since July 2011, a result of solid US data, which also boosted American indexes, sending the DJIA closer to the 27,000 threshold. Adding pressure on the JPY was the Japanese Nikkei Services PMI, which fell to 50.2 in September, its lowest reading in two years and barely holding in expansionary territory. There won't be relevant macroeconomic releases in the country this Thursday.
Trading near its daily high of 114.44, the pair is poised to extend its advance according to technical readings in the 4 hours chart, as not only the pair gained upward momentum, but also moving averages which anyway remain well below the current level. The Momentum indicator bounced strongly after flirting with its 100 level, while the RSI maintains its bullish slope despite having entered overbought territory. The next big hurdle comes at the 114.70/80 area, where the pair set monthly highs at the end of 2017.
Support levels: 114.05 113.70 113.35
Resistance levels: 114.75 115.00 115.30
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