USD/JPY Current Price: 108.55
- The Japanese macroeconomic calendar will remain empty this Friday.
- US Treasury yields edged sharply lower, dragging the pair alongside.
- USD/JPY pierced December low, fell to a fresh 2-month low.
The USD/JPY pair fell to 108.20, its lowest in almost two months, weighed by falling US Treasury yields during US trading hours. Despite Wall Street continued rallying, bonds appreciated driving yields sharply lower in the first trading day of the year. The yield on the benchmark 10-year note fell to 1.85%, after peaking at 1.95% at the beginning of the day. Japan will return to business after a long holiday, but there are no macroeconomic data scheduled for release.
USD/JPY short-term technical outlook
The USD/JPY pair has bounced from the mentioned low, ending the day at around 108.50. It has neared a mild-bullish 100 DMA for the first in almost three-months and fell for a fourth consecutive day, which reflects the increasingly bearish potential. In the shorter-term, and according to the 4-hour chart, the risk is also skewed to the downside, as the pair is developing below a firmly bearish 20 SMA, which already crossed below the larger ones, as technical indicators resumed their declines within negative levels, after correcting extreme oversold conditions.
Support levels: 108.40 108.10 107.70
Resistance levels 108.90 109.30 109.70
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