USD/JPY analysis: yen's strength persists as yields plunged

Valeria Bednarik FXStreet

USD/JPY Current price: 113.14

After spending most of the day under pressure, the USD/JPY pair bounced from a daily low of 112.90 mid American afternoon, as market's sentiment improved following news that French candidate Francois Bayrou withdrew from the presidential race to join Emmanuel Macron against Marine Le Pen. US Treasury yields bounced with the 10-year benchmark up to 2.45% from previous 2.43%. The pair stabilized around 113.50 ahead of the FED's Minutes, but fell after the release of the document, as the dollar was unable to rally following policymakers' pledge to raise rates "fairly soon," should the economy remains in the growing path. The pair was once again weighed by yields, as the 10-year benchmark fell back to 2.42% following FED's news. From a technical point of view, the risk remains towards the downside, as intraday advances remained contained by a bearish 200 SMA, currently around 113.70, whilst the price pressures its 100 SMA, and technical indicators turned lower around their mid-lines. Another attempt below 112.90, particularly if Asian shares fall, will probably open doors for additional declines towards the 112.00/20 region this Thursday.

Support levels: 112.90 112.50 112.10

Resistance levels: 113.70 114.20 114.60

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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