10-year treasury yield hits 5-day low, pushes USD/JPY below 100-HMA

The USD/JPY is exploring the downside on speculation the Fed is nearing an end of the tightening cycle.
The pair is being guided lower, possibly by the 10-year treasury yield, which hit five-day lows soon before press time.

Omkar Godbole FXStreet Contributor

Powell's dovish speech continues to weigh over both the US Treasury yields and the greenback.

At press time, the 10-year treasury yield is trading at a five-day low of 3.03 percent, having shed four basis points yesterday. More importantly, the decline in the treasury yields is likely pushing the USD/JPY pair lower.

The currency pair dipped below the 100-hour moving average (HMA) of 113.41 a few minutes before press time and could slide further, as the double top breakdown seen in the 10-year treasury yield's daily chart is signaling the path of least resistance is to the downside.

Fed Chair Jerome Powell, at 17:00 GMT yesterday, said the interest rates are just below the range of neutral estimates, squashing bets of an extended tightening cycle. As a result, the dollar will likely remain on the defensive. The downside in the USD/JPY, however, could be limited as increased prospects of fewer Fed rate hikes could put a strong bid under the global equity markets.

USD/JPY Technical Levels

USD/JPY

Overview:
    Today Last Price: 113.38
    Today Daily change: -25 pips
    Today Daily change %: -0.220%
    Today Daily Open: 113.63
Trends:
    Previous Daily SMA20: 113.33
    Previous Daily SMA50: 113.03
    Previous Daily SMA100: 112.21
    Previous Daily SMA200: 110.37
Levels:
    Previous Daily High: 114.04
    Previous Daily Low: 113.44
    Previous Weekly High: 113.24
    Previous Weekly Low: 112.3
    Previous Monthly High: 114.56
    Previous Monthly Low: 111.38
    Previous Daily Fibonacci 38.2%: 113.67
    Previous Daily Fibonacci 61.8%: 113.81
    Previous Daily Pivot Point S1: 113.37
    Previous Daily Pivot Point S2: 113.1
    Previous Daily Pivot Point S3: 112.77
    Previous Daily Pivot Point R1: 113.97
    Previous Daily Pivot Point R2: 114.3
    Previous Daily Pivot Point R3: 114.57

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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