USD/JPY goes into consolidation after rising to fresh monthly high at 110.81

USD/JPY extended its rally during the European session on Wednesday.
10-year US Treasury bond yield is rising for the sixth straight day.
US Dollar Index stays afloat in the positive territory above 93.00.

Eren Sengezer FXStreet

The USD/JPY pair closed in the positive territory on Tuesday and pushed higher on Wednesday. After reaching its highest level since early July at 110.81, the pair seems to have gone into a consolidation phase and was last seen posting small daily gains at 110.70.

Eyes on US inflation data, T-bond yields' reaction

Rising US Treasury bond yields help USD/JPY preserve its bullish momentum since the beginning of the week. The benchmark 10-year US Treasury bond yield, which rose 14% in the previous five trading days, is currently trading at its strongest level since mid-July at 1.368%, up 1.2% on a daily basis.

Moreover, the USD continues to outperform its major rivals with the US Dollar Index clinging to modest gains near 93.20. Later in the session, the US Bureau of Labor Statistics Consumer Price Index (CPI) data will be watched closely by market participants.

Investors expect the Core CPI to edge lower to 4.3% in July from 4.5% in June. A softer-than-expected inflation reading could limit USD/JPY upside. On the other hand, a strong print is likely to fuel T-bond yields' upside and allow USD/JPY to advance toward 111.00.

Technical levels to watch for

USD/JPY

Overview
Today last price	110.7
Today Daily Change	0.14
Today Daily Change %	0.13
Today daily open	110.56

Trends
Daily SMA20	109.91
Daily SMA50	110.15
Daily SMA100	109.66
Daily SMA200	107.32

Levels
Previous Daily High	110.6
Previous Daily Low	110.28
Previous Weekly High	110.36
Previous Weekly Low	108.72
Previous Monthly High	111.66
Previous Monthly Low	109.06
Daily Fibonacci 38.2%	110.48
Daily Fibonacci 61.8%	110.4
Daily Pivot Point S1	110.36
Daily Pivot Point S2	110.16
Daily Pivot Point S3	110.04
Daily Pivot Point R1	110.68
Daily Pivot Point R2	110.8
Daily Pivot Point R3	111

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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