USD/JPY analysis: easing yields cap the pair's advance

Valeria Bednarik FXStreet

USD/JPY Current price: 105.72

USD/JPY faces an immediate resistance around 106.00.
Strong equities maintain the pair afloat ahead of Wednesday's US Q4 GDP.

The USD/JPY pair surged to 105.89, its highest in almost a week, amid resurgent equities. European and Asian indexes closed with strong gains, while US ones extended their Monday's rally. Higher US Treasury yields at the beginning of the day also gave an impulse to the pair, although yields retreated ahead of the close to end the day lower. Softer-than-expected US data capped the advance during the last trading hours of the day but weren't enough to take it down. The Japanese macroeconomic calendar has nothing to offer this Wednesday while the final version of US Q4 GDP, to be released later in the day, has little chances of shaking the pair. Technically, the 4 hours chart shows that the pair's rally stalled below a now horizontal 100 SMA, offering a moderate resistance at around 106.00. The Momentum indicator in the mentioned chart heads north at over two-week highs, while the RSI consolidates around 59, all of which favors another leg higher, particularly if the 106.00 resistance gives up.

Support levels: 105.40 105.10 104.80

Resistance levels: 106.00 106.40 106.75

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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