USD/JPY about to break out below 110.00?

USD/JPY is heavily bearish and 110.32 could be fragile.
USD/JPY MA's signal a break lower.

Ross J Burland FXStreet

Currently, USD/JPY is trading at 110.41, up 0.03% on the day, having posted a daily high at 110.56 and low at 110.26.

Following from yesterday's comments from Kuroda who hit the wires when he reiterated his commitments that he will continue to pursue policies that will push inflation toward the 2% target, USD/JPY traded between 110.24/98 overnight, closing at 110.37, but for the most part was consolidating above 110.32 NY session low, the 100% Fibo target off the Dec 12-14 drop.

US yields subdued recovery post softer yields in Europe

Analysts at Westpac noted that US yields lifted to effectively unchanged (2.55%) after a pre-US open drift to test 2.52% on the back of softer yields in Europe (Bunds 56bps, 10yr Gilts 1.30%). "The pullback in Bunds and Gilts were due to a notably less hawkish tone from ECB officials today and UK’s CPI edged below estimates, affirming the likely peak in inflation. The US 10-30yr spread moving below 30bps was a clear point of interest," the analysts added.

USD/JPY levels

Valeria Bednarik explained that, technically, and according to the 4 hours chart, the pair remains biased lower, as the 100 SMA extended its bearish slope below the 200 SMA and both far above the current level, while technical indicators hover within negative territory after correcting oversold conditions. "This week low at 110.32 is the support to break to confirm another leg lower," Valeria added.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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