USD/JPY Price Analysis: Gains momentum on rising US Treasury bond yields

USD/JPY reached fresh five-week highs at 134.57, with bulls eyeing 135.00.
Oscillators at bullish areas favor further upside in the USD/JPY.
Downside risks lie below 134.00, which could drive the USD/JPY towards 133.00.

Christian Borjon Valencia FXStreet

The USD/JPY moved higher as US Treasury bond yields resumed their uptrend, following the last week’s hawkish commentary by Federal Reserve (Fed) officials. Fed Board Governor Christopher Waller’s comments that more tightening is needed, triggered the latest jump in the 10-year US T-bond yield. Therefore, the USD/JPY rallied and is trading at 134.47, up 0.52%.

USD/JPY Price Action

The USD/JPY extended its gains past the last week’s high of 134.04, and it’s aiming to challenge a break above January 6 high at 134.77. On its way up, the USD/JPY climbed above several solid resistance areas, like the 200-day Exponential Moving Average (EMA) EMA at 133.70, followed by the 100-day Exponential Moving Average (EMA) at 134.00. Once the pair cleared those levels, a challenge to 135.00 is on the cards.

The Relative Strength Index (RSI) cements the upward case in bullish territory, while the Rate of Change (RoC) indicates that buying pressure is increasing.

If USD/JPY rallies above 135.00, the next resistance would be 136.00, followed by the psychological 137.00 level before testing the YTD high at 137.91. Conversely, if the USD/JPY retraces, the first support would be 100-day EMA at 134.00. A breach of the latter will immediately expose the 200-day EMA at 133.70, followed by the 50-day EMA At 133.14, before sliding to 133.00.

USD/JPY Daily Chart

USD/JPY Technical Levels

USD/JPY

Overview
Today last price	134.46
Today Daily Change	0.69
Today Daily Change %	0.52
Today daily open	133.77

Trends
Daily SMA20	132.19
Daily SMA50	133.47
Daily SMA100	133.14
Daily SMA200	137.16

Levels
Previous Daily High	133.84
Previous Daily Low	132.17
Previous Weekly High	134.04
Previous Weekly Low	131.83
Previous Monthly High	137.91
Previous Monthly Low	129.64
Daily Fibonacci 38.2%	133.2
Daily Fibonacci 61.8%	132.81
Daily Pivot Point S1	132.68
Daily Pivot Point S2	131.59
Daily Pivot Point S3	131.01
Daily Pivot Point R1	134.35
Daily Pivot Point R2	134.93
Daily Pivot Point R3	136.02

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

GBP/USD clings to 1.3500 amid marginal losses

GBP/USD alternates gains with losses around the 1.3500 neighbourhood on Tuesday. Indeed, Cable struggles to further extend its incipient recovery in a context of continuous instability in the Middle East and modest gains in the Greenback.

EUR/USD remains slightly offered near 1.1530

EUR/USD trades with humble losses in the 1.1540-1.1530 band following the closing bell in Euroland on Tuesday. Indeed, the pair’s tepid decline comes amid the marginal advance in the US Dollar, as traders continue to closely follow developments in the Middle East and gear up for the upcoming US CPI data.

Gold loses the grip below $4,400

Gold retreats from its earlier tops and briefly revisited the $4,350 region per troy ounce on Tuesday. The yellow metal’s modest retracement follows lacklustre gains in the US Dollar and declining US Treasury yields across the curve, all amid steady uncertainty from the geopolitical landscape.

Crypto Today: Bitcoin and Ethereum consolidate, XRP dips as optimism for a US-Iran deal fades

Bitcoin (BTC) maintains a neutral outlook on Tuesday while testing support at $64,000. Investors appear to be sitting on the fence, awaiting a catalyst for a breakout above $65,000.

The inflation narrative is still way more important than the employment story

Core bonds sold off yesterday with the belly of the curve slightly underperforming in the US while European curves showed more of a bear flattening. Daily changes on the US curve varied between +4.7 bps (2-yr) and +6.4 bps (7-yr).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.