USD/JPY analysis: bearish momentum to increase below 109.20

USD/JPY Current price: 109.88

  • The yield on the benchmark 10-year Treasury note peaked for the day at 2.95%, retreating later to 2.89%.
  • Safe-haven yen backed by global retaliation against US Trump's tariffs on aluminum and steel.

The Japanese yen gained on the back of lingering worries over global trade, resulting in the USD/JPY pair breaking below the 110.00 level after hitting a daily high of 110.75. The pair replicated yields' behavior, as US Treasury yields surged at the beginning of the day but eased after Wall Street's opening, settling below Wednesday's closing levels. The yield on the benchmark 10-year Treasury note peaked for the day at 2.95%, retreating later to 2.89%. Comments from the Chinese Commerce Ministry who said that he has no choice in implementing new tariffs on US goods, as the unpredictable US behavior needs strong responses, and tariffs on US products imposed by the EU and Turkey so far, fueled demand for the safe-haven currency. The pair trimmed Wednesday's gains and is back trading in the 109.80 area, at risk of falling further, as in the 4 hours chart, the pair is battling with converging 100 and 200 SMA, while technical indicators turned sharply lower, the Momentum currently pressuring its mid-line but the RSI indicator already at 40. A slide below 109.55, the immediate support, should lead to a test of 109.20, a critical support now, as below it bulls will likely give up resulting in a steeper decline ahead.

Support levels: 109.55 109.20 108.80

Resistance levels: 110.15 110.45 110.90  

View Live Chart for the USD/JPY

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