USD/JPY rebounds to 110 as Wall Street starts erasing early losses
|- 10-year US T-bond yield turns positive on the day.
- Wall Street rebounds after starting the day deep in the red.
- US Dollar Index continues to move sideways below 98.
After edging higher to a two-week high of 110.30 during the Asian session, the USD/JPY pair reversed its direction and erased 50 pips to touch a session low 109.80 in the early trading hours of the NA session before rebounding modestly. As of writing, the pair was down 0.1% on the day at 110.
Pressured by the ongoing conflict with the U.S. government and the Chinee tech-giant Huawei, major equity indexes in the U.S. started the day deep in the negative territory today to help the safe-haven JPY outperform its rivals. However, the fact that the Dow Jones Industrial Average almost returned to last week's closing level in the last hour and the 10-year Treasury bond yield turned positive on the day suggests that the market sentiment is turning neutral.
On the other hand, the US Dollar Index, which gained 0.7% on a weekly basis to close near 98 last Friday, stays in the upper half of its latest trading range, helping the pair limit its losses. Although the data published by the Chicago Fed today hinted at a slowdown in the economic expansion in April, the greenback didn't have a difficult time resilient against its major rivals. The DXY was last at 97.94, losing only 0.07% on a daily basis.
The next data from Japan, machinery orders and trade balance, will be released on Wednesday and the risk perception is likely to continue to drive the pair's price action in the near-term.
Technical levels to consider
With a daily close above 110 (psychological level), the pair could target 110.40 (20-DMA) and 110.80 (100-DMA). On the downside, support could be seen at 109.80 (daily low), 109.50 (May 17 low) and 109 (psychological level/May 13 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.