USD/JPY extends two-day winning run, hits six-week high

USD/JPY prints six-week highs on dovish central bank expectations.
The uptick in Asian equities is likely weighing over the anti-risk JPY.
USD/JPY is flashing green despite the drop in the US yields.

Omkar Godbole FXStreet Contributor

USD/JPY is better bid for the third straight day and is currently trading at 107.69, the highest level since Aug. 1.

As of now, the US 10-year yield is reporting a three basis point drop to 1.71%, having rallied by 8 basis points and 9 basis points on Monday and Tuesday, respectively.

The pair's uptick, therefore, could be associated with the dovish Bank of Japan (BOJ) expectations. With the pickup in global growth taking longer than expected, the BOJ may feel pressured to cut rates further into the negative territory next week, sources familiar with the matter have told Reuters.

Also, Asian stocks except the Shanghai Composite index are reporting gains and seem to be adding to the bearish pressures around the anti-risk JPY.

Eyes trendline resistance

The pair could challenge the resistance of the trendline connecting April 24 and Aug. 1 highs, currently at 108.07, courtesy of the dovish BOJ expectations and if equities remain bid.

The Japanese Yen may find bids if the European Central Bank (ECB) sounds less dovish-than-expected on Thursday, sending the equities lower. In that case, the test of the trendline resistance may remain elusive

Technical levels

USD/JPY

Overview
Today last price	107.69
Today Daily Change	0.15
Today Daily Change %	0.14
Today daily open	107.54

Trends
Daily SMA20	106.38
Daily SMA50	107.15
Daily SMA100	108.23
Daily SMA200	109.5

Levels
Previous Daily High	107.59
Previous Daily Low	107.18
Previous Weekly High	107.23
Previous Weekly Low	105.74
Previous Monthly High	109.32
Previous Monthly Low	104.45
Daily Fibonacci 38.2%	107.43
Daily Fibonacci 61.8%	107.34
Daily Pivot Point S1	107.28
Daily Pivot Point S2	107.03
Daily Pivot Point S3	106.88
Daily Pivot Point R1	107.69
Daily Pivot Point R2	107.84
Daily Pivot Point R3	108.1

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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