USD/JPY analysis: recovering alongside with yields

Valeria Bednarik FXStreet

USD/JPY Current price: 112.66

The USD/JPY pair flirted with Friday's low at the beginning of the day, falling down to 111.93 before recovering up to 112.48 mid London morning. The pair retreated at the beginning of the US session, as US data was generally disappointing, with the advance in the Durable Goods Orders' headline, being offset by the core reading that came in negative, and pending home sales that fell well beyond expected. The pair, however, broke higher ahead of Wall Street close as stocks recovered their early losses, while Treasury yields advanced following comments from US President Trump, pointing to large infrastructure investment. The 10-year note benchmark jumped to 2.36% after plummeting to 2.32% on Friday, backing the advance in the pair. Holding near a daily high of 112.72, the 4 hours chart shows that technical indicators have turned sharply higher from oversold readings and are currently entering positive territory, not enough at this point to confirm a stronger advance, whilst the 100 and 200 SMAs maintain bearish slopes above the current level, with the shortest around 113.05. The advance could extend, should the positive sentiment persist, although investors may turn cautious and wait for Trump's speech before the Congress before giving the pair another directional push.

Support levels: 112.50 111.95 111.60

Resistance levels: 113.05 113.45 113.90

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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