Resistance:
113.99 (23.6% Fib R of 2011 low - 2015 high)
114.54 (23.6% Fib R of Nov low - Dec high)
115.50 (March high)
115.97 (Jan 2016 low)
Support:
112.89 (100-DMA + 23.6% Fib R of 108.13 - 114.37)
112.45 (falling trend line support)
111.99 (38.2% Fib R of Nov low - Dec high)
111.60 (Feb low)
4-hour chart
- Bearish price-RSI divergence followed by a falling top formation suggests the pair is likely to breach 113.00-112.89 levels and move towards 112.50 levels. The RSI is sloping downwards and is on the verge of breaking below 50.00 levels, while the accumulation-distribution line is more likely to turn lower once again.
- The 4-hr chart also shows a bigger rising trend line support around 112.15 levels.
Daily chart
- The MACD is above zero levels, but the bars are losing height, suggesting loss of bullish momentum, while the RSI has turned lower from the overbought zone. Thus, Monday’s uptick could be short lived.
10-year treasury yield looks heavy
- Last week’s candle is a bearish inverted hammer, which also marked a failure to hold above the key level of 2.3% (former double top neckline).
- The candle suggests the recovery from the low of 2.165% has ended at last week’s high of 2.425% and the yield could be heading back to 2.165% and possibly to 2.00%.
- The bearish technical study of the 10-year treasury yield only adds credence to the possibility of a drop in the USD/JPY pair to 112.50 levels.
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