USD/JPY analysis: yields lead the way, but upside limited
USD/JPY Current price: 112.12
The USD/JPY pair rallied up to 112.46, its highest in over a month, as bonds came under pressure worldwide following Draghi's hawkish comments early London, indicating that things are improving in the region and hinting somehow that QE may come to an end sooner than expected. US Treasury yields jumped to their highest in nearly two weeks, with the US 10-year note benchmark up to 2.20% from previous 2.14%. Japan won't release any macroeconomic reading during the upcoming session, with the pair therefore set to keep following yields, and sentiment. The pair retreated from the mentioned high, but settled above the 112.00 mark, presenting a moderate upward tone by the end of the US session, given that the 4 hours chart shows that the price continues developing above its 100 and 200 SMAs, but also that technical indicators are beginning to retreat after nearing overbought levels. The immediate support comes at 112.00, the 38.2% retracement of its April/May bullish run, and the positive tone will persists as long as the level contains intraday declines. Below it, however, the risk will turn clearly towards the downside.
Support levels: 112.00 111.60 111.20
Resistance levels: 112.45 112.80 113.20
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.
