USD/JPY set to tackle next support at 109.55 – TDS

FXStreet Insights Team FXStreet

USD/JPY has pushed lower through major trendline support that comes in around 110.46 today. Mazen Issa, Senior FX Strategist at TD Securities, thinks a re-coupling in 10-year TIPS yield and USDJPY is likely underway.

Additional selling interest emerges

“USD/JPY has not kept pace with a sharp move lower in real rate differentials over the last several days. This has been a fairly reliable correlation over the last year, suggesting downside risks are building.”

“Ahead of the 110.40 (+/-) level is the main resistance zone to the upside, while the first significant target to the downside comes in at 109.72.”

“Below the 109.72, we think the market would start to look for a test of the top of the cloud (109.55) ahead of conventional support in the 109.20/30 zone.”

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FXStreet Insights Team

FXStreet

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