USD/JPY finds bids near 107.50 as Treasury yields regain poise

Bounces-off lows near 107.50 on renewed buying in Treasury yields.
Will it take-out the key 107.78 resistance ahead?

Dhwani Mehta FXStreet

The USD/JPY pair caught a fresh bid-wave in tandem with Treasury yields across the time horizon, now pushing the rates back towards two-month tops of 107.73.

10-year Treasury yields reversed a dip to 2.904 percent and turned positive to head back towards four-week tops of 2.934 percent while 2-year Treasury yields also erased losses to trade near the highest levels since September 2008 at 2.441 percent,

Meanwhile, easing global trade war concerns combined with ongoing peace talks on the Korean peninsula continues to dampen the demand for the Yen as a safe-haven, with Yonhap now reporting that North and South Korea have opened the hotline between the leaders.

The pair awaits the sentiment on the Wall Street for the next push higher while the dynamics around Treasury yields will keep the USD/JPY traders busy in the day ahead.

USD/JPY levels to watch

FXStreet’s Analyst, Omkar Godbole noted: “The relative strength index (RSI) is trending north in favor of the bulls, having formed a base above 50.00 in the last two weeks. The Bollinger bands (+2, -2 standard deviation from the 20-day moving average) has adopted a bullish bias.”

“The pair looks set to close above 107.78 and extend gains to 108.50 (38.2% Fib R of Nov high - Mar low). The base seems to have shifted higher to 106.50. A close below 106.50 would signal a short-term bullish-to-bearish trend change."

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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