USD/JPY bounces sharply from 4-month lows, back above 109.00
|USD/JPY bounced to the upside amid a recovery in equity prices and a slide in US bonds. The pair bottomed earlier at 108.58, the lowest level since April and currently trades at 109.30, still lower for the day but far from the highs.
Main indexes reversed its trend on rising speculations about the departure of Stephen Bannon from his position as White House Chief Strategist. The Dow Jones was at the lowest in 4 weeks at 21,640 and now is just 0.09% lower at 27,730. A rally in crude oil prices also boosted the index.
In the bond market, the US 10-year yield bottomed at 2.16% the lowest since July and then bounced back above 2.20% weakening the yen.
Back above key level
The rebound of the USD/JPY pair pushed the price back above the 108.60/80 area that is relevant support. That zone capped the downside several times since April, so a consolidation below could lead to further depreciation of the US dollar.
USD/JPY managed to rise back above 108.80 and also on top of 109.00. Now momentum favors the upside. The next resistance levels could be located at 109.80 (Aug 4 low) and 110.30 (20-day moving average).
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