USD/JPY struggles to hold above 110.50 as US T-bond yields fall
|- US Dollar Index erases daily gains, turns flat near 96.15.
- Wall Street starts the day slightly higher.
- 10-year T-bond yield falls more than 1%.
The USD/JPY pair came under a modest selling pressure in the early NA session and fell to a fresh daily low at 110.37 as the greenback lost its footing. At the moment, the pair is trading at 110.43, losing 0.07% on the day.
After staying flat for the majority of the day, the U.S. T-bond yields dropped sharply in the last couple of hours and forced the US Dollar Index to retrace its daily gains. As of writing, the 10-year reference was down 1.25% on the day while the US Dollar Index was virtually unchanged at 96.15. There won't be any macroeconomic data releases from the U.S. in the remainder of the session and investors will be focused on the Atlanta Fed president Bostic's speech.
Meanwhile, major equity indexes in the U.S. started the day slightly higher on Monday with the Dow Jones Industrial Average and the S&P 500 adding 0.35% and 0.12% respectively. If we see the Wal Street extend higher in the session, the JPY could struggle to stay strong against its rivals and the pair's downside may stay limited.
Technical outlook
110 (psychological level) stays as the initial support ahead of 109.30 (200-DMA) and 108.70 (Jun. 1 low). On the upside, resistances could be seen at 110.50 (100-DMA), 111.05/10 (20-DMA/50-DMA) and 111.45 (Aug. 8 low).
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