USD/JPY: range trading persists in spite of positive clues
|USD/JPY Current price: 107.38
- US Treasury yields rally, equities pared gains but remain afloat.
- USD/JPY comfortable between 107.00 and 108.00, risk skewed to the upside.
The USD/JPY pair trades around 107.40, modestly higher daily basis amid a strong spike in government bond yields, although still confined to its usual range. The pair reached 107.51 early Asia, remaining afloat amid rising US Treasury yields, but unable to rally amid the absence of buying interest around the greenback. The yield for the US 10-year note peaked at 2.90%, now standing at 2.89% after closing Wednesday at 2.87%. Equities, which rallied for the first two days of the week have struggled to extend such gains on Wednesday, and the picture seems to be the same today. Japan didn't release relevant data overnight, and the US will offer some minor figures today, including weekly unemployment claims and a regional manufacturing index that can hardly trigger a sharp rally in the pair.
From a technical point of view, and while the downtrend seen during February/March seems to be over, the pair is unable to rally and seems comfortable consolidating in the 107.00/108.00 region. Intraday technical readings skew the risk to the upside, given that in the 4 hours chart, the pair keeps developing above its moving averages, with the 100 SMA extending its advance above the 200 SMA, while the Momentum indicator heads north within positive territory. The RSI, however, consolidates around 57, indicating a limited buying interest at the time being. The pair is also developing above a daily ascendant trend line, which now offers an immediate short-term support around 107.10. Still, it would take a break below 106.50 to dent the upward potential and favor a steeper decline ahead.
Support levels: 107.10 106.80 106.50
Resistance levels: 107.50 0 107.90 108.20
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